Mumbai, April 22: Rating agency Crisil has revised downward India's GDP growth forecast for fiscal 2009 to 8.1 per cent, from the earlier 8.5 per cent, in view of high inflation and global growth outlook. "Our earlier GDP forecast of 8.5 per cent had assumed a cut in the policy interest rate by the central bank in response to the slowing economy.

This is now ruled out since current inflation and inflationary expectations are way beyond the RBI's comfort zone of 4.5 to 5 per cent," Crisil Principal Economist Dharmakirti Joshi said. The rate of inflation zoomed past the seven per cent mark by the end of last fiscal. Inflation is expected to remain high in the next few months due to continuation of global pressures and an unfavourable base effect.

However, Crisil expects it to soften toward the end of the year and stabilise at an average of 5.5 per cent in FY'09. "If monsoons are sub-normal and agricultural production falters, inflation scenario could worsen," the agency said in a statement. Nothwithstanding the moderation, the overall growth scenario is expected to remain strong with investment as the main driver. "Domestic private consumption demand will also provide some support to the economy against slowing external demand," it said.

The recent scaling down of global growth projections has resulted in Crisil revising growth projections. The country's growth will be slower but at a healthy 8.1 per cent, it said. Crisil has also adjusted downward the sectoral forecast for industry and services to 8 per cent and 9.8 per cent, respectively. Growth of agriculture, assuming a normal monsoon, is likely to be at three per cent.