India's GDP growth likely to be around 5% this fiscal

The Indian economy is expected to grow at around 5% in the current financial year and the slowdown is likely to continue for some time, according to DBS India.

The country's economic growth slowed to 5% during the last financial year that ended on March 31, from an average of 8% over the past decade.

"We have lowered the GDP growth projection quite significantly. It is probably going to be between 3.8 and 5%. I think it would be closer to five," DBS India GM and CEO Sanjiv Bhasin told PTI.

He said it is difficult to predict as to how long the slowdown in the Indian economy is going to continue, and growth rate to remain at this level, because the upturn based on certain economic fundamentals does not appear to be on the horizon at this point of time.

The Finance Ministry believes however that India's economic growth would be over 5%.

On the rupee, Bhasin said the measures that have been announced since the new RBI Governor has taken over have resulted in the strengthening of the currency.

The local currency had depreciated to an all-time low of 68.85 on August 28 from 54.99 on December 31. It is currently hovering around 61/USD level.

Bhasin further said that the Current Account Deficit (CAD) is showing signs of recovery. Moreover, the FCNR scheme has been launched and overseas borrowing has been made available to the banks.

"It is reasonable to presume that CAD and the access to foreign currency should fundamentally lend support to the rupee," he added.

Meanwhile, the World Bank today slashed India's economic growth forecast for the current financial year to 4.7% from an earlier projection of 6.1%.

Last week, the International Monetary Fund, in its World Economic Outlook, projected an average growth rate of about 3.75% at market prices for India in 2013-14, which is expected to pick up to 5.1% next year.