Brace yourself for a slowdown in growth momentum | business | Hindustan Times
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Brace yourself for a slowdown in growth momentum

business Updated: Jan 06, 2011 22:06 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Economists are already grappling for options to sustain growth, keep prices in check and maintain interest rates at moderate levels to ensure that cost of borrowing for corporations do not go up to an extent that it discourages investment.

And their latest worry is food prices touching 18.3%.

All eyes are now on the Reserve Bank of India (RBI) which will present the next policy review later this month.

Industry captains said that any further rise in interest rates could affect the growth momentum.

India's GDP has grown by 8.9% during the first six months of 2010-11, making it the second-fastest growing economy in the world, behind only China's expected 9% growth in 2010. It had grown by 7.4% last year.

The better-than-expected growth was driven by a robust farm output that grew by 4.4% during the quarter, up from 0.9% in the year-ago period. Manufacturing grew by 9.8% during July-September quarter against 13% in previous quarter.

"We expect inflation to be higher and maintain that the RBI will resume tightening in January," said Rajeev Malik, senior economist with broking and research firm CLSA.