OECD Economic Outlook: Indian Economy Growth Slows to 8% in 2006
- Indian economy grew very rapidly at the beginning of fiscal year 2006 (April 2006 to March 2007), expanding by close to 9%, after rapid growth during the previous year.
- Some signs of overheating have emerged: inflation has picked up to over 6% and the current account moved into a deficit of 1.3% of GDP in fiscal year 2005 and is likely to widen somewhat in fiscal year 2006.
- Agricultural output may weaken slightly bringing growth down to 8% in fiscal year 2006.
- In 2007 and 2008, the effects of the current tightening in monetary growth should be felt, slowing growth to 7% by the end of the projection period and ensuring that inflation moderates slightly, to around 5%.