The Indian economy probably grew an annual 6.9% in the quarter through September, at its weakest pace in more than two years, the median forecast from a poll of 22 economists showed.
Gross domestic product (GDP) growth in Asia's third-largest economy slipped from 7.7% clocked in the previous quarter, dragged down by the central bank's 13 interest rate increases in the past 18 months to contain near double-digit inflation and faltering global growth.
The forecasts ranged from 5.6% to 7.5%.
The last time the economy grew at sub-7% was in the quarter through June 2009, when western economies were stepping out of the global financial crisis of 2008.
FACTORS TO WATCH
* India's industrial output grew by a meagre 1.9% in September from a year earlier, the slowest pace in two years.
* The Indian services sector contracted at its fastest pace in over two years during October, knocked by a slump in global demand and tight monetary policy.
* The partially convertible rupee hit a record low of 52.73 against the US dollar on Nov 22, as investors fled risky assets and its recent weakness is expected to spike India's import bill and in turn, push up prices.
{{/usCountry}}* The partially convertible rupee hit a record low of 52.73 against the US dollar on Nov 22, as investors fled risky assets and its recent weakness is expected to spike India's import bill and in turn, push up prices.
{{/usCountry}}* The Reserve Bank of India may hold rates in its December policy review as growth risks from a slowing economy and a fragile global economic environment take centre stage. It had said in the October review that further rate increases may not be needed, if inflation starts to ease from December.
* Indian exports in October probably slowed to just over 10 % from a high of 82% in July, reflecting risks to growth coming from the euro zone beset with sovereign debt woes.
MARKET IMPACT
* Government bond yields are likely to ease if GDP growth slips below 7%, traders said, adding the new benchmark 10-year bond yield could trade in a 8.70-8.75% range.
* The short-term overnight indexed swaps (OIS) rates are also likely to fall, and the one-year rate is seen trading around 8%, traders said.
* If the number comes around 7% or a tad higher, the markets are likely to shrug it off, traders said.