Bankers have said a slowdown in GDP growth to 7.8 per cent in the last quarter of FY’11 was on expected lines as the Reserve Bank of India and international agencies like the IMF had already hinted at a dip in growth.
“(It) is not something totally unexpected. It was clear many of RBI’s reports and international financial institutions had been hinting that the growth may not be the same as last year,” the Central Bank of India Chairman and Managing Director, Mr S. Sridhar, told reporters here today.
Looking at the possible slowdown in growth, banks have already taken the right steps, he said, adding that the RBI has also downsized the growth expectations both in advances and deposits in its annual monetary policy.
With the data released today confirming the fears of slowdown in growth, lenders and other agencies will have to take a “more nuanced” response, he said.
According to the data, GDP grew 7.8 per cent in the January-March quarter versus 9.3 per cent during the same period year ago, while the total GDP growth for the entire FY’11 was 8.5 per cent.
The Union Bank of India Chairman and Managing Director, Mr M.V. Nair, said one should not read too much into the 7.8 per cent number as it is only a couple of notches below the RBI’s forecast of 8 per cent.
“A few points here and there should not matter much,” he said, conceding that the numbers are less than what he had expected.
Both Mr Sridhar and Mr Nair drew attention to the RBI’s stated policy of targeting the rising inflation number even if it results in the growth slowing down in the near term.