New Delhi: Preparing the country for a lower growth of around 7% in current fiscal due to the global crisis, the Mid-Year Review of the economy on Tuesday said the decline in commodity prices will help bring down the inflation to “normal levels” by March 2009.
“We should be prepared for growth in 2008-09 as a whole to be around 7%” because the crisis in industralised countries is bound to have impact on the world economy, the review tabled in Parliament said.
It said most emerging economies have slowed down significantly and “India has also been affected”.
On the positive side, the review expects the inflation to cool down to “normal levels” by end of this fiscal.
It said India continues to retain its position as a preferred destination for investments. While the foreign direct investment (FDI) inflows accelerated in the first half of this fiscal and are likely to remain strong, the prospect on remittances also seem favourable.
“Compared to other emerging economies, India has several strengths that can help mitigate the adverse effects of the global financial crisis provided appropriate policy action is initiated,” it said.