News: 'Indian economy can withstand global slowdown'

(PTI 29/09/2006) Mumbai - Country's economy, growing at a healthy eight per cent, will be less affected by a global slowdown due to its internal strengths and resilience, and inflation will remain in the broad range of 5.5 per cent, the RBI chief has said.

"Though there would be an effect, India is likely to be less affected and in the medium term can confidently aim to remain in the broad range of GDP (8 per cent) and inflation (5.5 per cent)," the RBI Governor, Dr Y.V. Reddy, told reporters here.

Considerable domestic demand, diversified external trade of institutions and limited exposure to foreign currency of the corporates and individuals are the factors that will safeguard India's economy from the global slowdown, he said on the sidelines of a FICCI-IBA global banking conference.

Reddy pointed to a global paradoxical phenomenon in which growth expectations were moderating and inflation was hardening.

"It is an interesting combination," he remarked.