New Delhi:
- Multilateral lending agency Asian Development Bank has revised upwards India's growth projection to 6 per cent for the current fiscal on account of rising business confidence but warned that inflationary pressure would continue.
- "Emerging signs of a recovery in private business confidence and a continued large fiscal stimulus announced in the July 2009 budget helped bolster India's projected economic expansion to 6 per cent this year, upgraded from 5 per cent in March," ADB said in its update on Asian Development Outlook 2009.
- India, it added, would be able to clock 7 per cent growth rate during 2010-11. Country's growth rate slipped from 9 per cent to 6.7 per cent in 2008-09 on account of the impact of the global financial crisis.
- Projecting an inflation of 4-5 per cent by March 2010, the ADB said, "inflationary pressures are likely to persist, driven by high food prices and expansionary monetary and fiscal policies."
- The inflation has turned positive for the week ended September 5, after remaining in the negative zone for about three months.
- Rising food inflation, ADB said, would create a dilemma for the monetary authority which is currently engaged in combating the impact of the financial meltdown by following easy money policy.
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