Indian Prime Minister Manmohan Singh said Friday he was confident the country will be able to maintain a nine percent economic growth rate despite a possible global slowdown.
"I am confident that this year too we will be able to sustain nine percent growth and hold the price line at acceptable levels," Singh told a gathering of business leaders in New Delhi.
Singh said the government was aware of concerns about a slowdown because of a global credit crunch. "I do not see any reason why we cannot sustain nine percent growth even in the face of a global slowdown," Singh said.
The government has forecast a growth of 8.7 percent in the current financial year ending March as agriculture and manufacturing output slowed from last year's rapid pace.
In the first half of the fiscal year ending September, the economy expanded 9.1 percent and has grown at an annual average rate of 8.6 percent in the past four years. But economists have warned of an economic downturn because of high interest rates, increasing food and oil prices, a rapidly rising rupee and weakening global demand.
India's annual inflation rate has been hovering around four percent, and was expected to increase after the government raised petroleum and diesel prices on Thursday - the first time since June 2006.
India's central bank has hiked interest rates nine times since 2004 to keep prices under control. Singh said inflation control was a priority for his government, despite concerns about its impact on growth.
"Inflation is an iniquitous tax. It hurts the poor more than the rich. Therefore, it is essential that we ensure that the poor are not adversely affected by high inflation, particularly of basic items of consumption."