In yet another forecast that India's economic growth will moderate this year, the United Nations Conference on Trade and Development on Thursday said the country's GDP would expand by 7.6 per cent in 2008.
Unctad's GDP projection is broadly in line with forecasts by Indian agencies like the Reserve Bank of India and the Prime Minister's Economic Advisory Council, which have projected a growth rate of 7.9 per cent and 7.7 per cent respectively in 2008-09, as against 9 per cent recorded in 2007-08.
Finance Minister P Chidambaram expects the Indian economy to expand by more than 8 per cent this year.
Releasing the Unctad report on Thursday, Nagesh Kumar, director general, Research and Information System on Developing Countries said the Indian economy was expected to grow by at least 8 per cent in 2008-09. "We do not see a major sluggishness in the economy.
Moreover, the pay commission award will also add to the GDP growth. This will improve demand. In 1996, when the last government pay revision was announced, GDP growth increased by at least one percentage point," Kumar said.
The Unctad report also blamed speculation as one of the key reasons for increase in commodity prices seen across the world.
The report observed that the rise in commodity prices since 2002 and the slow supply response had resulted in low inventory levels in many countries, giving rise to speculation.
"Although there is no conclusive evidence of the extent to which speculation is contributing to commodity prices so far, there can be little doubt that it has significantly