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Sunday 06th of June 2010
May 31, 2010    

Indian economy continues to see high growth

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by Kay Murchie

The Indian economy continues to perform strongly after figures showed annualised growth of 8.6% in the three months to March - primarily due to growth in manufacturing.

The economy for the year ending March 2010 grew by 7.4% - slightly exceeding the Reserve Bank of India’s (RBI) forecast of 7.2%.

Indian Finance Minister, Pranab Mukherjee, said he “expects the current economic momentum to remain,” and has forecast that the economy will expand by 8.5% in the financial year to March 2011.

However, despite the strong growth, there are ongoing concerns of high inflation in Asia’s third largest economy.

The latest figures show annual inflation reached 9.59% in April, after reaching 9.9% in March.

However, Government officials say that headline inflation has now reached its peak.

The RBI has hiked interest rates in the last couple of months in order to combat inflation.

However, there are concerns for the country’s budget deficit, which is currently the equivalent of 6.9% of GDP – the Government plans to reduce this to 5.5% next year.

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