Govt moves not enough: Banking majors

Goldman Sachs, for instance, says the stimulus will help specific sectors in coping with the downturn, however, “we do not think it is material enough to significantly alter the aggregate demand slowdown. We (therefore) continue to believe that India does not have the fiscal space to substantially boost slowing demand.” The moves were, in fact, widely expected by the market, even though the extent of the interest rate cuts was marginally ahead of expectations. “Although the moves are positive, we do not think they materially alter the growth outlook for the Indian economy. We continue to expect GDP growth to slow to 6.7% in FY09 and 5.8% in FY10,” say Tushar Poddar and Pranjul Bhandari from Asia Economics Research at Goldman Sachs. The same is the case with Citi India which is of the opinion that while these measures are overall positive, “with incremental data both on the global and domestic front being worse than anticipated, they may not be sufficient to reverse the deceleration in growth,” says Rohini Malkani, economist, Citi India.