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Here is what the experts had to say:
Shubhada Rao, YES Bank, Mumbai
"The imputed growth for second half FY13 is at 4.7%. In our opinion, it is likely to be revised upward.
The main reasons for this considerable slowdown is a sharp correction in services at 6.6%, led by trade and finance. The base effect in Q4 is positive, despite which, the numbers are projected lower which implies sharp sequential worsening of economic activity.
We have been anticipating marginal improvement in Q4 on the back of a small pick up in investments."
Upasna Bhardwaj, ING Vysya Bank, Mumbai
"While the slowdown in overall GDP estimates have been widely expected, the slowdown in services, particularly the trade, hotels, transport, communication category has been sharper than anticipated.
Moreover, the sharp slowdown clearly points towards continued slack in consumption demand, which is expected to keep the core inflation under check going forward".
Phani Sekhar, Angel Broking, Mumbai
"It might have small impact but would not impact much as this fiscal is almost over. People are focusing on next fiscal.
It'll be interesting to see when actual data comes if there is any structural driver that is lowering GDP numbers and whether rate cuts can prevent that."
A Prasanna, ICICI Securities Primary Dealership Ltd, Mumbai
"The estimate seems to be on the lower side. It is surprising that construction sector is estimated to slow sharply in the second half. There is some concern that the drastic slowdown in government spending could affect October-March GDP data.
Even then, I expect this advance estimate to be revised upwards. I think we will end up closer to RBI's estimate of 5.5%."
Dariusz Kowalczyk, Credit Agricole, Hong Kong
"India says FY13 GDP may rise 5%, well below the 5.5% consensus - this is negative for rupee and overall sentiment in India. It may well push the rupee OIS and bond yield curves down. Yesterday we closed our long rupee position at a 4% profit and are waiting for some weakening before re-entering."
Rupa Rege Nitsure, Bank of Baroda, Mumbai
"5% GDP growth for the full year is more in tune with reality. The industrial sector downturn has extended beyond anyone's expectation. In the first eight months of the year, for almost six months the manufacturing output has been negative.
Exports have been continuously declining, non-food credit growth is slowing while agricultural sector performance has also been sub-optimal.
After the government started showing a firm resolve to put things in place in mid-September, the series of data that has been released is also reflecting sustained deterioration across various growth indicators."