Published: 27 Sep, 2013
Economic expansion will slow to 4 percent this fiscal year from a decade-low 5 percent in the 12 months ended March, according to HSBC Holdings Plc.
Elsewhere in Asia, Japan's inflation accelerated to the fastest pace since 2008 in August on higher energy costs, a report showed today. In Europe, France is due to release gross domestic product data. U.S. consumer spending probably rose in August for a fourth consecutive month, a Bloomberg survey showed ahead of figures due today.
Rajan may hold off from further repo-rate increases for now as higher borrowing costs would threaten to deepen the slowdown in Asias third-largest economy, said Sujan Hajra, an economist at Anand Rathi Financial Services Ltd. in Mumbai.
Prime Minister Manmohan Singhs government has pledged to restrain the fiscal shortfall to lower price pressures, part of wider changes to economic policy in the past year to improve the nations outlook ahead of elections due by May.
The success of that effort lies beyond Rajans control as subsidies stoke government spending, which poses a risk to the inflation fight, said Ashutosh Datar, an economist at brokerage India Infoline Ltd. in Mumbai.
The central bank is moving in the right direction, said Arun Singh, an economist at Dun & Bradstreet Information Services India Pvt. in Mumbai. Now its the governments turn to act responsibly on the fiscal side and step up efforts to ease bottlenecks to address the drivers of inflation.
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