The Reserve Bank of India (RBI) Monday lowered the country's economic growth forecast for the current financial year to 5.7 percent from its earlier projection of 6.5 percent.
In a document released a day ahead of the second quarter review of the monetary policy, the central bank said that along with the slowing growth inflationary pressure was likely to further worsen in the Indian economy.
The RBI revised upward its projection for inflation based on the wholesale price index (WPI) to 7.7 percent from its earlier estimate of 7.3 percent.
The median projection for 2012-13 in the Reserve Bank?s survey of professional forecasters has been lowered to 5.7 percent from 6.5 percent for growth, while that for average WPI (wholesale price index) inflation is revised upwards to 7.7 percent from 7.3 percent,? the RBI said.
Indian economy has registered sluggish growth in the recent quarters. It expanded by 5.3 percent in January-March 2012 quarter and 5.5 percent in the quarter ended June, according to government data.
The lowering of growth forecast by the RBI comes a few weeks after the International Monetary Fund (IMF) sharply lowered India's GDP growth projection, citing sluggish structural reforms and worsening global economic situation.
The IMF early this month cut India's GDP growth forecast for 2012 to 4.9 percent from its earlier projection of 6.2 percent announced in July.