… But S&P says this will slow GDP growth

The economy is expected to be adversely affected by the surge in inflation. “Despite signs of growth slowing down from last year, the RBI has already hiked interest rates twice during June and may well do so again. Higher interest rates are expected to moderate growth even further,” rating agencies Crisil and Standard & Poor’s said. S&P Asia Pacific chief economist Subir Gokarn said, “High interest rates, along with a slowing global economy, will trim GDP growth to 7.8 per cent in 2008-09.”