PMEAC projects 8.6% GDP for FY11, March-end inflation at 7%

New Delhi, Feb 21 (PTI) The Prime Minister''s EconomicAdvisory Council today projected the economic growth in thecountry at 8.6 per cent for the current fiscal on the back ofrebound in farm output and inflation to come down to 7 percent by March-end due to declining food prices.

The PMEAC, in its ''Review of the Economy 2010-11'' reportreleased today, also said the country''s GDP is likely to growby 9 per cent in 2011-12, back to the high rate it hadwitnessed before onset of the global economic recession.

PMEAC''s projection of 8.6 per cent growth is in line withgovernment estimates released earlier this month.

According to PMEAC, the agriculture sector is expectedto grow at 5.4 per cent this fiscal.

This is higher than the 0.4 per cent rate of growthregistered by the farm sector in 2009-10.

"Agriculture will do very well this year. We might haverecord harvest of wheat," PMEAC Chairman C Rangarajan saidhere.

The council also said the services and industry sectorswould maintain the high growth rate of last few years.

While services is expected to register a growth rate of9.6 per cent, industry is projected to grow by 8.1 per cent.

During the last fiscal, services sector had witnessed agrowth of 9.1 per cent, while manufacturing had grown by 8.8per cent.

The PMEAC further said the overall inflation is expectedto be at 7 per cent by March-end and that the rate of pricerise in the case of manufactured goods has been low.

"The declining trend in food prices, particularly that ofthe vegetables, will result in lower food inflation...

considerable care from the policy side has to be taken toensure that the manufactured goods inflation remains below 5per cent in 2011-12," it said.

The overall inflation for January has been at 8.23 percent, while food inflation was at 11.05 per cent in the firstweek of February.