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Economy expected to grow 7.3% in FY12: FM

30 Nov 2011 Evaluate

India's economy is expected to grow by 7.3% in the fiscal year ending March 2012, Finance Minister Pranab Mukherjee said. He further said, ‘global financial problems had adversely affected domestic growth. Taking into account the trend of the last two quarters, I expect the GDP growth to be 7.3 percent (in 2011/12).’

The economy grew at the slowest rate for more than two years in the second quarter, confirming the country's shift to lower growth rates of around 7%. The growth rate skidded to 6.9% for the July-September quarter, on the back of string of rate hikes and a weakening global economy. The last time India's economy expanded at below 7% was in the financial quarter to June 2009 as global economies were emerging from the global financial crisis.

Persistently high inflation weakened demand had impelled the Reserve bank to hike rates 13 times over the last 18 months, while the latest global slowdown has hit demand for the nation's exports. However, the GDP figure was in line with expectations, putting more pressure on the central bank to reverse its line of rate hikes.

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