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| India's growth outlook has 'weakened' says central bank | India's growth outlook has 'weakened' says central bank |
| (40 minutes later) | |
| India's central bank said the outlook for the Indian economy has weakened more than expected but inflation remains high, ahead of an interest rate decision. | India's central bank said the outlook for the Indian economy has weakened more than expected but inflation remains high, ahead of an interest rate decision. |
| The Reserve Bank of India (RBI) has raised benchmark rates 13 times since March 2010 to curb consumer prices. | The Reserve Bank of India (RBI) has raised benchmark rates 13 times since March 2010 to curb consumer prices. |
| Inflation rose at 7.47% in December, which despite being a two-year low is still well above government targets. | Inflation rose at 7.47% in December, which despite being a two-year low is still well above government targets. |
| These factors are "complicating policy choices" the href="http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=25835" >bank said. | |
| "Monetary actions will need to strike a balance between risks to growth and inflation," the RBI said. | "Monetary actions will need to strike a balance between risks to growth and inflation," the RBI said. |
| Growth concern | Growth concern |
| The RBI has said that domestic growth has been hit by a number of factors. | The RBI has said that domestic growth has been hit by a number of factors. |
| "Growth in 2011-12 is moderating more than was expected earlier," the bank said. | "Growth in 2011-12 is moderating more than was expected earlier," the bank said. |
| "The business climate has weakened. The slack in investment and net external demand may keep the pace of recovery slow in 2012-13." | "The business climate has weakened. The slack in investment and net external demand may keep the pace of recovery slow in 2012-13." |
| It also warned of spillover from Europe and the slowing global economy. | It also warned of spillover from Europe and the slowing global economy. |
| "With growth decelerating even in emerging and developing economies, the spillovers from euro area are likely to pull down global growth." | "With growth decelerating even in emerging and developing economies, the spillovers from euro area are likely to pull down global growth." |
| And while inflation has been moderating, which could allow monetary policy space to focus on spurring growth, the bank called this a "temporary respite". | And while inflation has been moderating, which could allow monetary policy space to focus on spurring growth, the bank called this a "temporary respite". |