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PM remains upbeat about India's economy

By Ammar Zaidi in Muscat
November 09, 2008 14:48 IST
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Prime Minister Manmohan Singh on Sunday said he expected India's economy to grow by a healthy 7 to 7.5 per cent in 2009, despite the global financial crisis eroding output across sectors.

"Due to the current financial crisis, growth rate may come down somewhat next year, but I am still confident that we will be able to achieve a rate of between 7-7.5 per cent," he said while addressing the Indian community in Oman.

His forecast is a tad lower than the 7.7 projected in the Reserve Bank's survey of forecasters released earlier this month.

Global economic crisis: Coverage

The International Monetary Fund's World Economic Outlook Update has pegged growth at a much lower 6.3 per cent for next year.

Already, the industrial production growth for August was a poor 1.3 per cent, followed by a modest 5.1 per cent growth in six core infrastructure industries in September. These are measures of how the industry has been expanding and tell us what to expect.

Besides, high cost of borrowings has made credit unattractive, thus hitting investments - key to robust economic growth. While the RBI has lowered key short-term lending rates, the government has goaded public and private sector banks to slash lending rates to increase money supply.

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Ammar Zaidi in Muscat
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