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Minister forecasts 5.5pc growth in last financial quarter

Aap
Monday, November 26, 2012

INDIA'S economy logged around 5.5 per cent growth in the last financial quarter, a rate that could boost calls for lower interest rates to spur activity.

India's once-booming economy has been hit by high interest rates, Europe's debt crisis that has slowed exports, and sluggish investment caused by domestic and overseas concerns about policy and corruption.

Finance Minister P Chidambaram on Saturday said he expected official data to be released next Friday to show that the economy grew by "around 5.5 per cent" in the three months to September 30.

That would be down from 6.9 per cent in the same second-quarter period a year earlier.

"It goes without saying that we face a difficult situation," Chidambaram said at a bankers' conference, adding the "global economy is still in crisis".

India's economy was growing by more than eight per cent before 2011/12.

But it has been performing increasingly worse with the Congress-led government of Prime Minister Manmohan widely criticised for its handling of the situation.

Even though 5.5 per cent growth would be the envy of much of the world, it is not enough for India, which has been aiming for close to double-digit expansion to substantially reduce crushing poverty.