RBI's tight monetary policy to moderate economic growth: S

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Mumbai, Dec 5 (UNI) The Reserve Bank of India's tight monetary policy is expected to moderate India's economic growth rate to 8.1 - 8.6 per cent in 2008, against 8.5 - 9 per cent in 2007.

This was stated here today by global rating agency, Standard and Poor (S&P) in its 2008 outlook for the Asia-Pacific financial market.

The rating agency further said that India is relatively immune to US sub-prime crisis-triggered credit woes with domestic growth driving demand. But, domestic drivers may face inference due to high global oil prices as India continues to see a rapid growth in energy consumption, and this may impact the ability of the Indian economy to grow under its own steam.

S&P keeping a neutral outlook on the Indian equity markets, said that additional foreign inflows may be muted due to the recent moves by the market regulator SEBI to limit foreign fund inflows via off-shore derivatives.

Politics is likely to continue to weigh heavily on the credit rating of sovereigns in the Indian sub-continent, S&P said and added that India's outlook is stable with fiscal consolidation commitments across all Government levels, and state finances having shown vast improvements.

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