Economy unlikely to grow at 9% this FY: FM

Economy unlikely to grow at 9% this FY: FM

Economy unlikely to grow at 9% this FY: FM

“Due to volatility in international commodity prices and other supply constraints, it may not be possible to achieve the growth rate of 9 per cent (+/-0.25 per cent) for the current financial year,” Mukherjee said while addressing the probationers of the Indian Economic Service (IES) here.

Headline inflation (WPI) for March stood at 8.98 per cent, while food inflation was at 8.76 per cent for the week ended April 16. According to Mukherjee, one of the major challenges faced by India is to “achieve sustained GDP (Gross Domestic Product) growth at the rate of 9 to 10 per cent with fiscal prudence and moderate inflation”.

Mukherjee also said that major emerging market economies are experiencing robust growth, though surge in capital inflows and inflation, especially through hardening of global commodity price, is a source of worry. He said in case of Europe, there are still some concerns, with Greece followed by Ireland and now Portugal seeking help from the European Union and the International Monetary Fund (IMF).

There may be other countries in the European Union that may face sovereign debt problems, Mukherjee said, adding there are some concerns on the strength of the post-crisis revival in these economies. The Minister, however, said he is hopeful that on the whole the year 2011 would see an improvement in the world economy.

Mukherjee said leaders of the G20 countries have been discussing global financial instability and the resulting economic slowdown.

“...we are engaged in finding ways to ensure better macroeconomic coordination, regulation of markets, strengthening of the monitoring and response mechanisms and promoting growth in a sustainable manner,” he added.

At the same time, countries in the developed and the developing world have adopted revival strategies, keeping with their needs, the Minister added.