Citi cuts India GDP forecast

Citigroup said on Tuesday it was cutting its target for India's
economic growth for the 2009/ 10 fiscal year to 5.8 per cent, from 6.8
per cent earlier, taking into account the effects of a weak monsoon.
'Factoring in negative agri growth but leaving industry and
services unchanged, we cut our FY10 GDP estimates to 5.8 per cent
from 6.8 per cent, but retain FY11 (2010/11) estimate at 7.8 per
cent,' it said in a note. The bank maintained its growth forecasts
for industry at 5.5 per cent and services at 8.6 per cent. The US
bank also said that it now expected policy tightening of 125 basis
points for 2009/ 10, compared with an earlier forecast of 75 basis
points. Citi said the government's relief measures to deal with
the drought in many districts of the country could widen the fiscal
deficit to 7 per cent from 6.8 per cent of the gross domestic
product.