27 Feb :Impacted by the global economic meltdown, the Indian economy has clocked slowest quarterly growth in over five years, at 5.3 per cent, in October-December of this fiscal as agriculture and manufacturing contracted, despite a stimulus package.
Against the whopping 8.9 per cent growth in the same period a year ago, economists said it is now the Reserve Bank’s turn to provide stimulus to the economy by cutting rates, as inflation is already down to 3.36 per cent.
While the fall in manufacturing, by 0.2 per cent, in the third quarter was expected, as was evident in negative industrial production numbers for October and December, contraction in farm output by 2.2 per cent was a bit surprising.
"What has come as a surprise is agriculture. There is a turnaround but we can be optimistic that the figures will improve," Chief Statistician Pronab Sen said.
For the nine months of this fiscal, the economy grew by 6.9 per cent against nine per cent a year ago, which may make it difficult to attain the 7.1 per cent growth this fiscal, as was pegged officially.
Rupee at an all-time low of 50.65/67 Vs dollar
The Indian rupee on Friday breached its previous all-time low and was quoting at 50.65/67 against the greenback in late morning deals on continued capital outflows and higher month-end dollar demand, besides a strong US dollar in the overseas market.
According to forex dealers stronger dollar abroad gave an opportunity to the foreign banks to buy American currency in local market to sell it in offshore non-deliverable forward contracts for immediate profits.
In fairly active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit opened lower at 50.69 a dollar from previous close of 50.46/47 and remained stable in late morning deals.
Previously the rupee had touched an intra-day low of 50.60 on 2nd December, 2008.
In the last four trading sessions the Indian currency has tumbled by 85 paise or 1.71 per cent.
Sustained selling by Foreign Institutional Investors in equity markets also weighed on the rupee.
They pulled out nearly USD 1.6 billion in the current calendar year so far.
Weakness in the equity markets also put pressure on the rupee.
The Indian benchmark Sensex was down by 87 points in early trade, while Asian indices showed a mixed trend on Friday morning.