M A I N   N E W S

FICCI projects 8% GDP growth
Economic Outlook Survey estimates 8.6% growth for 2010-11

New Delhi, May 30
Growth will moderate to 8 per cent this fiscal compared to the 8.6 per cent it is estimated to have expanded by in 2010-11, a survey of economists conducted by Federation of Indian Chambers of Commerce & Industry (FICCI).

The survey was conducted by polling 12 leading economists from the banking and financial sector and research institutions. The survey also predicted inflation to accelerate over the first half of this fiscal year (April-September) because of an expected increase in diesel, cooking gas and kerosene prices and supply-side constraints in vegetables, fruits, pulses, milk and eggs.

The economists said inflationary pressures would moderate at around 7 per cent by the end of the fiscal as international crude oil prices were expected to stabilise once the over-reaction to problems in West Asia, which resulted in prices of oil shooting up, calmed down.

The measures expected to be taken by the government to ease supply-side bottlenecks and the possible lagged impact of the successive policy rate hikes by the Reserve Bank of India coming in to play would also impinge the demand-side pressure on inflation.

“A majority of the economists felt that the RBI should stop its current anti- inflationary rate hikes when the inflation moderates to around 7-7.5 per cent. They expect that the RBI will further increase the repo rate by another 50-75 basis points in this rate hike cycle,” FICCI said. The RBI will conduct its mid-quarterly policy review on June 16. — IANS