Chidambaram sees FY growth close to 9 percent
Finance minister Palaniappan Chidambaram said on Friday he expected the economy to grow at close to 9 percent in the financial year to end-March, and that inflation would remain at current levels in the months ahead.
Annual expansion dipped below 9 percent for the first time in three quarters in July-September as industrial output slowed, but analysts said the central bank's full-year forecast of 8.5 percent should be met.
"Overall growth has moderated. As predicted growth is close to 9 percent," Chidambaram told reporters.
"I am confident it will be close to 9 percent in this fiscal. I will be happy to do 9 percent," the finance minister said.
Data released on Friday, showed Asia's third-largest economy expanded 8.9 percent in its fiscal second quarter from a year earlier, as higher interest rates and a strong rupee dragged on manufacturing and exports.
But Chidambaram said turbulence in international markets, a possible slowdown in global output, tight monetary policy in India and high global oil prices could see growth this fiscal year dip below 2006/07.
India, the world's fastest-growing major economy after China, expanded 9.4 percent in the fiscal year to March 2007, its strongest pace in 18 years.
The central bank has raised interest rates five times between mid-2006 and March this year but left them steady at its last review in October.
It has also increased reserve requirements by 250 basis points since December to check credit growth and cool inflationary pressures.
As a result, manufacturing output braked to an annual 6.6 percent in September from 10.5 percent in August.
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