India’s economy might accelerate to 9 per cent on strong consumer demand, Chief Statistician Pronab Sen said today.
He, however, added inflation would be the major concern going ahead and the data which would primarily determine future monetary policy measures.
The economy had grown by 8.6 per cent in the quarter ended March 31 and by 7.4 per cent during 2009-10. Finance Minister Pranab Mukherjee and the Planning Commission have projected the overall growth in gross domestic product for 2010-11 to be at 8.5 per cent.
“Investments are rising and demand is accelerating,” said Sen on the sidelines of a National Sample Survey Organisation (NSSO) seminar. “The Reserve Bank of India will be watching the core inflation rate very closely and may raise (policy) rates if it accelerates,” he added.
Sen further mentioned growth numbers for 2009-10 were “pleasant “ and that expectations of achieving 8.5 per cent growth in 2010-11 was a “clear possibility”.
The Reserve Bank of India (RBI) last month signalled plans to raise borrowing costs “cautiously” as the European debt crisis threatens global economic growth. Sen’s forecast comes after HSBC Group Plc and Markit Economics’ Purchasing Managers’ Index released yesterday showed Indian manufacturing expanded in May at the fastest pace in more than two years.
RBI has raised rates twice since mid-March. The bank’s benchmark reverse repo rate was 3.75 per cent while wholesale-price inflation was at 9.59 per cent in April 2010.
