In its quarterly review of the economy, the thinktank, however, said an 8 per cent growth in the medium term would be difficult to achieve without reforms. The average Gross Domestic Product (GDP) growth forecast for the period between 2003-04 and 2007-08 was 7.05 per cent.
For the current fiscal, NCAER has stated that while agriculture would grow 7 per cent as against a decline of 3.1 per cent last year, the services sector would clock 7 per cent growth.
The manufacturing sector was expected to grow between 5.7 per cent and 6.5 per cent. Higher appreciation of the rupee would pull down growth in industry and the services sectors.
The hardening of rupee was unlikely to hamper the achievement of the export growth target of 12 per cent in dollar terms. However, an appreciating rupee and the increase in industrial activity would push up imports growth, leading to a wider trade deficit and a marginal surplus on the current account.
High overall economic growth and the hardening rupee would make imports cheaper.
Together, they will pull inflation down to 2.9-3.8 per cent during the full year from 4.4 per cent in June. The fiscal deficit would, however, be higher at 6 per cent of the GDP at market prices compared with the government
