NCAER pegs GDP at 8.3%, interest rate hikes to hit housing

New Delhi, Apr 16 (UNI) The NCAER today forcast a growth rate of 8.3 per cent for the fiscal 2007-08 with agriculture, industry and services slated to grow at 2.6, 8.7 and 9.9 respectively, but said inflation and concomitant interst rates hike pose significant risks to the growth process.

Using a forcasting model, the NCAER says WPI is likely to average around 5.3 per cent in the current year.

Exports, till now displaying a hefty trend, are expected to slow down to 15.7 per cent as a result of a global slow down of GDP by 0.5 per cent and slower rise in international prices.

Thanks to the robust economic growth, merchandise imports will remain high, but slower than the last few years with their growth rate being pegged at 18.5 per cent.

However, net invisibles will grow by a respectable 20 per cent resulting in a surplus in the current account.

The NCAER views RBI moves at controlling inflation as hawkish, even though it does not clearly spell this out. ''The monetary policy in the form of higher interest rates and tight money policy would adversely affect sectors where credit is a critical input such as housing and new investments.'' More UNI SRS SBA VC2028