POLL - India's GDP growth seen slowing to 8.1 pct in June qtr

NEW DELHI (Reuters) - India's economy is likely to have grown an annual 8.1 percent in the April-June quarter, its slowest pace in nearly three years, as tight monetary policy to calm rising inflation dented demand.

A Reuters poll of 12 economists forecast expansion in the quarter, the first of the 2008/09 fiscal year, well below the previous period's 8.8 percent as the central bank stepped in to calm soaring prices.

"The pace is slowing and it will slow down from the previous quarter. We have the evidence that a slowdown has happened," said A. Prasanna, economist at ICICI Primary Dealership in Mumbai.

Industrial output, which accounts for nearly a quarter of GDP, expanded 5.2 in April-June, nearly half the 10.3 percent growth recorded in the same year-ago period.

Economists said the services sector, which accounts for more than 50 percent of GDP, would grow at 9.0-10.0 percent, while farming which contributes nearly 18 percent of total output was seen having expanded 2.5-3.0 percent during the quarter.

Asia's third-largest economy has grown at an average 8.8 percent in the past four years and the rapid expansion has grabbed global attention.

But the pace has slackened in the past few months as authorities struggle to keep a lid on inflation, which is now above 12.5 percent and at its highest in 13 years, by raising interest rates, tightening liquidity and cutting import duties.

The Reserve Bank of India raised banks' reserve requirements, or the cash reserve ratio (CRR), by 200 basis points in 2007 and a further 75 basis points to the end of June this year.

Its key lending rate -- the repo -- was increased by 75 basis points in the first six months of 2008.

Further tightening announced in July added 75 basis points to the CRR and 50 basis points to the repo rate, which now stands at a seven-year high of 9 percent.

Earlier this year, Prime Minister Manmohan Singh's Economic Advisory Council estimated the economy would grow by 7.7 percent in the year to the end of March 2009, below a forecast from the central bank of 8.0 percent.

Finance Minister Palaniappan Chidambaram has said he expects the economy to grow close to 8.0 percent this fiscal and most think-tanks expect growth in the 7.0-8.0 percent range.

"We expect GDP to moderate to 8.5 percent from previous quarter," said Shubhada Rao, chief economist at Yes Bank.

"Moderation has been essentially driven by a faster pace of correction in industrial growth during April-June."

Below are percentage growth forecasts for the April-June quarter of 2008/09 compared with a year earlier:

RESPONDENTS FORECAST

---------------------------------------------------

Institute of Economic Growth 9.0

Yes Bank 8.5

Centre for Monitoring Indian Economy 8.2

Bank of Baroda 8.2

Standard Chartered Bank 8.1

Indicus Analytics 8.1

Lehman Brothers 8.1

ICRIER 8.0

IDBI Gilts 7.9

Crisil 7.9

Kotak Mahindra Bank 7.8

ICICI Primary Dealership 7.8

-------------------------------------------------

Median 8.1

Average 8.1

Highest 9.0

Lowest 7.8

-------------------------------------------------