Indicating that a cut in interest rate is likely, the Reserve Bank has said despite high inflation it would take steps to support growth in the half- yearly review of monetary policy tomorrow.

 

RBI said the Survey of Professional Forecasters has lowered the GDP growth projection to 5.7 per cent from 6.5 per cent for the current fiscal. Average wholesale price based inflation forecast is revised upwards to 7.7 per cent from 7.3 per cent.It said the global growth prospects, both in advanced and emerging economies, have weakened and the euro zone troubles have affected business confidence and caused deceleration in global trade.

It said sustaining the reform initiatives of the government would be the precursor for a turnaround in economic activity.The government has in the recent past undertaken a host of reform initiatives including hiking diesel prices by over 5 Rs a litre and foreign investment norms for retail, pension, insurance, information and broadcasting sector.