Interest rates are likely to see a possible downward trend in the current year which will support growth prospects of the economy,Chanda Kochhar,chief executive officer and managing director of ICICI Bank,said today. "Interest rates are likely to be reduced in the near future which will support the growth prospects during this year," Kochhar said,addressing an event arranged by Wharton University of Pennsylvania titled 'India Economic Forum' here. The Reserve Bank of India (RBI) has raised interest rates 13 times since March,2010 by 375 basis points in its bid to control inflation that has been above 9 per cent for a year. However,a rapid slowdown in food inflation in December has raised hopes of a reversal of the monetary tightening cycle with reduction in rates. Referring to other reasons behind a possible high growth in 2012,Kochhar said strong rural consumption trend along with high growth in SME would drive domestic economy. However,she said that euro-zone problems would be a critical spot in determining the growth of the domestic economy which would be closely watched. Other experts too echoed a similar opinion about the growth rate in 2012. "India can grow at a rate of over 7 per cent and the global economic situation isn't as bad as it appears to be," chairman of ICICI Bank and Infosys,K V Kamath said. He also said that Asian economies look fine at this point of time and the US economy can grow at a rate of 3-4 per cent this quarter. Referring to markets,Kamath said it would take another 4-6 months to stabilise depending upon the government's policy action and reforms measures. Even foreign banks in India are optimistic about the growth rate in the current year if appropriate policy measures are taken to overcome some of the issues faced by the economy. "There are many positives for the domestic economy in 2012. However,appropriate policy actions and removal of bottlenecks in infrastructure are the prerequisite for attaining higher growth rate going ahead," Chief Executive Officer of Deutsche Bank,Gunit Chadha said.
