The Indian economy is recovering faster-than-excepted from the global slowdown and will grow by 8.5 per cent this year and by 9 per cent in 2011-12, although high inflation and rising interest rates remains key worries, the World Bank said in a latest report.
“India’s recovery after the slowdown is well under way. Growth is projected to recover to 8–9 per cent in the next two years,” the World Bank said in its report ‘South Asia Economic Update 2010: Moving Up, Looking East’ released on Monday.
But rising interest rates, a small appreciation of the rupee, and continued low growth in high-income countries weigh on the recovery. Risks to the outlook come from volatility in capital inflows, global recovery, and inflation shocks, it said.
“Indicators suggest growing optimism on the economy as evident from improved ratings, confidence indexes, and expectations surveys,” it said.