Macroeconomic Forecast India

January 2006 | Macroeconomic Forecasts

India will remain one of the fastest growing economies over our forecast period, following strong 8% growth in the third quarter of 2005, supported by solid gains in manufacturing. We expect growth to accelerate in this fiscal year (ending March 2006), rising to 7.9%, up from an estimated 7.0% growth in fiscal 2005. Despite our optimism, the possibility of high oil prices, and slower world growth provide downside risks. Meanwhile, strong domestic demand will continue to contribute to inflationary pressure, and some monetary tightening is therefore expected in early 2006.

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