Tushar Poddar, chief India economist at Goldman Sachs Group Inc., comments on the outlook for the country’s economy and the rupee. He spoke at a press event in Mumbai today.
India’s rupee fell today, snapping a six-day winning streak, as a move by the U.S. to extend tax cuts to boost growth in the world’s largest economy reduced the allure of higher-yielding currencies.
“We are expecting growth to continue to be strong next year. Our forecast is 8.7 percent on gross domestic product growth for the financial year ending March 2012 and this is being driven by investment demand.
“We are looking at 8.3 percent growth” for the financial year that ends March 31, he said.
“We are looking at an average number of 6 percent for the next fiscal year.”
On interest rates and central bank policy:
“With inflation expectations high, asset prices rising, and with high fiscal and current account deficits, we think that the Reserve Bank of India will have to hike interest rates through the course of 2011. We are expecting them to hike by a 100 basis points next calendar year.”
“We have revised our currency forecasts. We are looking at a 44 rupee target over 12 months with a three-month target of 45.”
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