MUMBAI, July 9: The Centre for Monitoring Indian Economy (CMIE), an independent policy research agency, has predicted a slowdown in the growth of real gross domestic product (GDP) to 4.5 and 5 per cent in the fiscal 1998-99 due to the decline in private consumption expenditure and investment activities. It has warned the inflation is expected to rise to about eight per cent while the balance of payments (BoP) situation would worsen.CMIE said the fiscal deficit is expected to rise by an additional Rs 3,500 crore following concessions announced by the government. The estimate of a lower growth in GDP implies that the gross fiscal deficit (GFD) as a percentage of GDP would be higher at about six per cent against 5.6 per cent estimated.
Exports are expected to grow by around five per cent and imports by 5.3 per cent in 1998-99. The trade deficit on customs data is projected to decline to $ 6.3 billion as against $ 6.8 billion deficit recorded in 1997-98.
However, deficit on the payments basis is expectedto rise from $ 15 billion to $ 15.8 billion. ``Inflation has started to rise and is expected to continue to increase in 1998-99 and the overall rise in wholesale price index in 1998-99 is projected to be about eight per cent,'' it said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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