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India's economic growth rate is likely to slow if the central bank hikes interest rates, Finance Secretary TV Somanathan told CNBC TV18 on Thursday.

India's central bank is likely to raise its inflation projection for the current fiscal year at its June monetary policy meeting and will consider more interest rate hikes, a Reuters reported on Wednesday.

The government is set to release the inflation print for April month later today. 

Morgan Stanley has lowered its forecasts for India's economic growth in the next two fiscal years, saying a global slowdown, surging oil prices and weak domestic demand would take a toll on Asia's third-largest economy.

Gross domestic product growth will be 7.6% for fiscal 2023 and 6.7% for fiscal 2024, 30 basis points lower than the previous estimates, the brokerage said in a note dated Tuesday.

In a surprise move, the central bank hiked its repo rate by 40 basis points (bps) to 4.40% following a emergency meeting earlier this month.

The monetary policy committee (MPC) expects inflation to rule at elevated levels, warranting resolute and calibrated steps to anchor inflation expectations and contain second round effects.

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