The Indian economy, which recorded five-year low growth in the third quarter of this fiscal, is expected to recover after September this year on the back of various stimulus measures announced and anticipated revival of the US economy by the time, a top economist said today.
"From October 2008 to September 2009, the growth will be slow... I believe that with the help of both fiscal and monetary policy measures, there will be a revival post- September," Chief Economic Advisor to the Department of Economic Affairs Ministry of Finance Arvind Virmani said at a seminar here.
An expected recovery in the US economy around September will also act as a catalyst to regain growth momentum, Virmani said.
"Downside risks will be eliminated from the US economy from September this year," Virmani said, adding, "no country is insulated from the (global financial) crisis."
For the third-quarter ended December, India's economy grew at a 5-year low rate of 5.3 per cent reflecting the fall in manufacturing and agriculture sector output and slowing consumer demand.
A high fiscal deficit, projected at 6 per cent in FY 09 against the earlier target of 2.5 per cent, was a "good thing" in the short-term in the face of financial crisis, Virmani said.
