RTTNews - India's real Gross Domestic Product growth will average around 7.2% over the next five years, despite risks to the global economy continue to remain high, PTI reported quoting London-based, Economist Intelligence Unit or EIU.
The think tank predicted that India might witness negative inflation for the next 3-6 months giving room for banks to slash interest rates further and said the negative inflation was not a serious concern for India. India's inflation turned negative at 1.61% for the week ended June 6, 2009 for the first time in three decades.
Manoj Vohra, Director of Research of EIU, expects the repo rate to be cut by a further 50 basis points to 4.25% in the next few months.
In India, the increase in fiscal deficit was the biggest risk for the economic growth, EIU said, adding that there might be a much sharper snap back in growth over the coming months led by aggressiveness of the global macroeconomic response.
EIU further stated that Asia would emerge as the world's second-fastest growing region over the next five years (200-2013), but this reflects on the strong growth performance by India and China.
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