Economy to login 8.2 pc growth this fiscal: ING Vysya

NEW DELHI: The economy is likely to grow by 8.2 per cent in the current fiscal from the estimated 7.2 per cent last financial year on the back of strong performance by the industrial and services sectors, ING Vysya Bank has said.

"The output gap is likely to close this fiscal as the economy stages a strong recovery. GDP growth is expected to rebound to 8.2 per cent in 2010-11 vs 7.2 per cent (estimated) in FY10," ING Vysya Bank economist Deepali Bhargava said while presenting the bank's economic outlook for 2010-11.

She further said a strong recovery in manufacturing is already established, adding the services sector is likely to complement industrial growth this fiscal.

Finance Minister Pranab Mukherjee has pegged GDP growth at around 8.5 per cent in the current fiscal while RBI had pegged it at 8 per cent with an upward bias.

GDP growth slowed to 6.7 per cent in 2008-09 due to the global financial meltdown. However, government's stimulus packages and stepped-up public spending pushed growth to an estimated 7.2 per cent in fiscal 2009-10-- as projected by Central Statistical Organisation. The FY10 GDP numbers will be released on May 31.

On inflation, the report said it is likely to average at 7.6 per cent in 2010-11--8.6 per cent in the first half and falling to 6.4 per cent in the second half. The report further said normal monsoon is likely to lead to a moderation in food prices and a sharp reversal in trend, but possible only in the second half.

"Rising manufacturing and fuel inflation is likely to keep the worries of the RBI on inflation alive," she said.

Overall, inflation stood at 9.59 per cent in April, although prices of a number of food items and non-food items such as metals rose. The main concerns are rising food prices as food inflation rose for second consecutive week to 16.49 per cent for the week ended May 8.