New Delhi: India's economy is expected to grow by more than 8 per cent in the fiscal year to March despite being hurt by the global slowdown and soaring oil prices, Prime Minister Manmohan Singh said on Wednesday.
Singh said annual wholesale price inflation, which rose to 12.6 per cent in early August, was showing some signs of moderation and prices were expected to moderate further due to steps taken by the government.
The government has cut import duties and banned exports of food items, while the Reserve Bank of India raised its key lending rate in both June and July to tame inflation.
The repo rate now stands at a seven-year high of 9 per cent. A Reuters poll of analysts showed inflation was forecast at 12.09 per cent for the 12 months ending Sept. 6, steady from a week earlier.
Singh said India's growth prospects may be affected by the global economic slowdown, the steep rise in international prices of petroleum products and those of other primary commodities.
"Even then, the overall growth rate of the economy will still exceed 8 per cent, making India the world's second-fastest growing economy." The economy grew by an average 8.8 per cent in the last four years, but the analysts expect growth to slow to under 8 per cent in the 2008/09 fiscal year ending next March.
Later, Finance Minister Palaniappan Chidambaram said the government wanted to lift the economy's growth rate to 10 per cent by 2011/2012, but said hurdles remained. "Our aspiration is to achieve over 9 per cent GDP growth and 10 per cent by 2011/12," he said.
"Sustaining 9-10 per cent growth in the medium term is a challenge. There is a need to remove supply-side constraints," he added.
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