NEW DELHI –The Organization for Economic Cooperation and Development Thursday raised India's economic growth forecast to 9.1% for the year ending March 31 2011 from an earlier estimate of 8.3%, citing better domestic demand due to improved farm output.
Asia's third-largest economy is expected to grow 8.2% in the year starting April 1 2011, the OECD said.
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"The recovery in the agricultural sector has helped to damp inflation, which appears to have peaked and is expected to continue to moderate in the near term," the OECD said in its Economic Outlook report.
It expects India's inflation rate based on the wholesale price index to rise 8.1% this fiscal year, and ease to 5.7% in the year starting next April as food prices moderate.
Strong economic growth and the spare capacity in the economy, which is expected to be slight, would spur the Reserve Bank of India to tighten policy rates though it has raised key rates six times this year, the OECD added.
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