According to Money Market News India's economy grew 6.1 percent in the June quarter from a year earlier, roughly in line with forecasts, as government stimulus measures helped spur demand, but a poor monsoon threatens to crimp growth later in the year even as it drives prices higher.
Weakness in private consumption combined with looming inflation complicates the Reserve Bank of India's exit from its expansionary monetary policy, with some economists expecting tightening measures to begin only in 2010.
"The RBI's dilemma, between hiking policy rates and hurting growth or staying pat but risking higher inflation expectations, only gets worse," said Nomura economist Sonal Varma.
Weakness in private consumption combined with looming inflation complicates the Reserve Bank of India's exit from its expansionary monetary policy, with some economists expecting tightening measures to begin only in 2010.
"The RBI's dilemma, between hiking policy rates and hurting growth or staying pat but risking higher inflation expectations, only gets worse," said Nomura economist Sonal Varma.
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