The economy will achieve near 8 percent growth in the current financial year despite the global slowdown, while lowering inflation remains a challenge in the short term, Prime Minister Manmohan Singh said in a statement on Tuesday.

Despite the global slowdown, we will still achieve a growth rate of close to 8 percent this year, the statement said.

India's headline inflation accelerated in August to 9.78 percent, its highest in over a year, and is a major concern for the federal government and the RBI.

Economists expect the Reserve Bank of India, which has raised rates 12 times since March 2010, to increase interest rates one more time in 2011 to fight persistently high inflation.

That move could come as early as Oct. 25, when the Reserve Bank of India meets to review its monetary policy.

India's September headline inflation data is due on Friday.