Economist Intelligence Unit (EIU), an arm of the London-based Economist Group, has lowered India's GDP growth forecast to 5.6 per cent for FY'09 from its earlier projection of 6.2 per cent.
"We expect India's GDP to grow only by 5.6 per cent in 2008-09, compared to 9 per cent last year," EIU India Director (Research) Manoj Vohra told PTI here today.
EIU's forecast is much lower as compared to the Reserve Bank of India's projection of around 7 per cent growth.
Citing the global economic meltdown, domestic credit squeeze and falling demand as prime factors impacting the Indian economy, the global economic think-tank has also forecast a further easing of interest rates.
"Indian monetary policy will be eased further in 2008-09 with two rate cuts of 0.25 per cent in the repo rate in the first-half of 2009," it said.
"Along with India, China too appears to be heading towards a sharp slowdown with economic growth expected to fall to around 6 per cent in 2009, which would be the slowest rate of growth since 1990," Vohra said.
In 2009, 29 countries, mostly developed well as some major emerging markets, would experience economic contractions, he said.
However, India would remain an attractive emerging market in view of the developed world's interest rates tending towards zero, Vohra said.