Indian economy to cross 8.9 per cent in September quarter

NEW DELHI: Union Finance Minister Pranab Mukherjee said today that he was confident of the economy crossing 8.5 per cent growth target in the current fiscal year.

Interacting with mediapersons outside Parliament, Mukherjee said the economy grew at 8.9 per cent, more than expected in the quarter through September.

"Amidst all depressing news, one good news is there that second quarter GDP growth has been 8.9 per cent. And they have revised the first quarter also to 8.9 per cent. That means we may be confident that the GDP growth at the end of the year will not be less than 8.7 to 8.75 per cent, which we projected,"

"I always go by conservative estimate. International Monetary Fund (IMF) estimate, as I mentioned earlier, have already projected growth to be more than 9 per cent," he added.

India's economy grew a faster-than-expected 8.9 per cent in the September quarter from a year earlier, data released on Tuesday showed. The median forecast in a Reuters' poll was for an annual rise of 8.3 per cent.

The GDP growth for the April-June quarter was revised upwards to 8.9 per cent from the provisional figure of 8.8 percent.

Economy grew more than expected in September quarter, boosted by farm output and manufacturing, putting pressure on the Reserve Bank of India (RBI) to tighten monetary policy although a rate increase next month still looks unlikely.

The strong GDP growth comes despite the RBI raising key rates by 150 and 200 basis points respectively since mid-March to anchor inflationary expectations.