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World Bank projects 7% economic growth for India
June, 11th 2008

World Bank expects India's economic growth to moderate to 7 per cent in 2008 on account of tightening of monetary policy and the resultant slowdown in demand for industrial goods.    

"GDP growth in India eased to a still strong 8.7 per cent in 2007, from 9.7 per cent in 2006, and is projected to slow further to 7 per cent in 2008," said the World Bank report on Global Development Finance released today.    

World Bank attributed the moderation in GDP to "monetary tightening in 2007 (that) led to softening in domestic demand".    

Though the restrictive measures prevented the further fuelling of inflation, they proved detrimental to exporters by strengthening rupee, the report said.    

There are growing signs of economy cooling down with deceleration in industrial production to 3 per cent in April 2008, it added.    

However, the report said, despite the slowdown the rate of consumption has not fallen mainly on account of large remittance flows and healthy wage growth in the country.    

The report also projects slowdown in global GDP from 3.7 per cent in 2007 to 2.7 per cent in 2008.

 
 
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