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India will see high growth: World Bank

July 24, 2006 18:36 IST
Source:PTI
The World Bank on Monday said hardening interest rates and a surge in oil prices worldwide will have only a marginal impact on India's economy and the country would continue to witness high GDP growth.

However, the actual impact on India's growth rate would depend on the duration of high interest rates worldwide and rise in global commodity prices, particularly oil, Michael Carter, country director, World Bank told PTI.

If the US deficit continues to widen and oil and other commodities prices continue to soar, the impact would be much more than if corrective measures are forthcoming, he said.

However, India would continue to witness high growth rate, he said. "I believe, India will witness eight per cent growth rate on sustained basis, provided interest rates and oil prices do not keep rising over a longer period," Carter said.

Even if high commodities prices and rising global interest rates pulled down India's growth rate below eight per cent, it would still be higher than world's standards.

The US Federal Reserve hiked its benchmark interest rate by 25 basis points last month followed by a similar move by Bank of Japan this month.

Crude prices continue to rule above $70 a barrel as tension in the Middle East persists, even though it came down a bit in early trade in Asia today.

Carter's comments came a day ahead of RBI's quarterly review of the monetary policy on Tuesday.  He, however, refused to anticipate movement of interest rates after the policy.

Source: PTI
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