The Indian economy will pick up pace by the end of the current financial year, although a full recovery may take longer, chief economic adviser to the PM Kaushik Basu said on Friday.
"This is a temporary downturn and the economy would start doing better even before the end of the year," Basu said at the Hindustan Times Leadership Summit.
He was speaking at a session on Emerging from the Economic Abyss.
Basu's comments came two days after national accounts data showed that the Indian economy's growth rate slumped to a 27-month low of 6.9% during July to September this year amid concerns of industrial deceleration as high interest rates and costly raw materials forced companies to defer capacity expansion plans.
India's investment is still high at 36.5% of GDP, although there has been a drop in investments in recent months, said Basu.
Basu said even at 6.9% growth, India remains among the fastest growing economies in the world given the current global context where major European economies are battling sovereign debt worries while the United States is facing prospects of stagnation.
"A mere statistical cross country comparison would show that India's 6.9% GDP growth rate is actually very good," Basu said.
He added that a growth rate of 9% in the medium term for the Indian economy appears "very much on the cards."
Norman Pearlstine, chief content officer, Bloomberg LP, said that a GDP growth of 6.9% in the US would be considered very high.
"We have not seen such high growths for a long time," he said, underlining the fragility of the global economy in the present scenario.
The absence of a strong central bank in many European economies means Germany will have to play the role of "Europe's lender of last resort."
Pearlstine said economies bounce back from crisis.
"Turkey is a great success story," he said pointing out that only a decade ago the International Monetary Fund had come to the rescue of Turkey.