Economy to grow by 8.5-8.8% in FY09: NCAER

New Delhi, May 6 (UNI) Despite the spiralling inflation and rising food prices, National Council for Applied Economic Research (NCAER) today said the economy is expected to grow by 8.5-8.8 per cent during the current fiscal.

''The Indian economy is expected to grow by 8.5-8.8 per cent during the current fiscal,'' NCAER said in its quarterly review of the economy.

The economic think tank however puts the average rate of inflation between 4.9 per cent and 5.2 per cent in FY09, higher than an average 4.4 per cent last year.

Planning Commission Deputy Chairman Montek Singh Ahluwalia also expects an eight per cent growth during the current fiscal, compared to 8.7 per cent growth witnessed in the previous fiscal.

''The slowdown in growth on account of adverse global factors may be offset by the expansionary fiscal policy,'' it said.

NCAER expects the agriculture output during the FY09 to grow by 2.5 per cent due to normal rainfall, which is slightly lower than the last year figure of 2.6 per cent.

The industrial production is estimated to grow by 8.9 to 9.4 per cent in comparison to 8.9 per cent during last fiscal, while the services sector is projected to expand by 10.2 to 10.5 per cent, against 10.7 per cent during FY08.

The exports, which grew by 22.9 per cent during the last fiscal, is estimated to grow by 16.6 to 17.9 per cent in the current financial year.

The NCAER pegs the imports growth at 18.2 to 19.5 per cent, against 30.2 per cent a year earlier.

The fiscal deficit during FY09 is expected to grow by 2.6 to 3.0 per cent, as compared to 3.1 per cent last fiscal, the economic think-tank said.

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