New Delhi - Investment bank Goldman Sachs lowered India's economic growth forecast for the financial year 2008-2009 to 6.7 per cent from an earlier 7.5 per cent on account of the global financial crisis in a report released Monday.

Goldman Sachs said the global crisis over the past several weeks had a larger than expected impact on the financial sector and knock-down effects on both domestic and external demand.

"The real economy is already beginning to feel the effects of the liquidity crunch despite the Reserve Bank of India and the government's massive liquidity infusion efforts," the research note said.

The corporate consultancy also revised the growth forecast for 2009-2010 down to 5.8 per cent from 7 per cent. India's financial year runs from April to March.

"We believe there is little fiscal room for additional stimulus in the financial year 2009-2010," the report said. "We look at the impact on corporate bank, household and government balance sheets and the negative feedback loops."

Goldman Sach's report comes a day after Indian Prime Minister Manmohan Singh said during a tour of Gulf nations on Sunday that the global financial crisis may hit the Indian economy more than was anticipated earlier.

IANS news agency quoted Singh as saying that India still hoped to achieve a growth of 7 to 7.5 per cent.

India is one of the world's fastest growing emerging economies and has posted annual gross domestic product growth of over 9 per cent since 2006. (dpa)