SINGAPORE (Reuters) - India’s gross domestic product growth is expected to return to “9 percent plus” this year, Trade Minister Anand Sharma said on Friday, led by strong corporate performance and rising savings levels.
Sharma also said he expected inflation, which is fuelled by food demand, to be brought under control.
“We are seeing strong economic growth. We are going back this year to plus 9 percent GDP growth,” Sharma told reporters in Singapore at the end of a two-day trip aimed at drumming up investment in the infrastructure sector.
The Indian finance ministry has forecast 8.5 percent growth for Asia’s third-largest economy in the current year, following a 7.4 expansion in the previous year. The IMF has forecast 8.8 percent growth.
Strong corporate sector performance and high levels of saving and investment have led to higher growth, Indian officials said last month. India is saving and investing about 34 percent of GDP, compared with around 30 percent prior to 2003.
Inflation, running at over 10 percent, has been a mounting concern, however, but Sharma said he expected it to be brought under control this year.
“Inflation has been there, fuelled by food articles demand and supply issues last year. We are assured this will improve this year,” he said.
The food price index rose 12.63 percent in the year to June 26, according to data released on Thursday, easing from the previous week’s annual rise of 12.92 percent.
Wholesale prices, the most closely watched inflation gauge in India, rose 10.16 percent in May from a year earlier and a senior government official said it could hit 11 percent in June.
Sharma said the government aimed to boost the share of manufacturing in GDP to 25 percent from 16 percent now and turn the country into a manufacturing powerhouse.
He said India’s infrastructure sector offered a huge opportunity for construction companies. “The sector is set to absorb $1.7 trillion in the coming 10 years, that’s great opportunity.” (Editing by Muralikumar Anantharaman)