Indian economy could grow by 8.5-9.5% in the next few years but inflationary pressures may persist due to high global oil and food prices, a United Nations panel said in a report released today."GDP growth for India over the next few years is projected to remain at between 8.5% and 9.5%," the UN Economic and Social Commission for Asia and the Pacific (UNESCAP) said.However, the sustainability of high economic growth with moderate inflation will depend critically on fiscal prudence and high investment levels, it said."India could achieve and sustain a 10% growth rate by further improving the country's business environment, by developing its physical infrastructure and human capital," UNESCAP said.Monetary policy will continue to play a critical role in maintaining price stability. "UNESCAP expects inflation at 5% for 2008," it said.A continuous vigil by all concerned - with appropriate policy actions - would be needed to stabilise prices and anchor inflationary expectations in a sustained fashion, it said.China and India, the region's economic locomotives, are expected to continue growing briskly in 2008, boosting the rest of the region.In the worst case scenario of a recession in the United States and a deeper depreciation of the dollar, the impact in much of the region would be harsh.However, the impact is likely to be felt less in economies led largely by domestic demand, such as India, it added.
