New Delhi: DB Research, a part of the German banking major Deutsche Bank, has said India is likely to grow 6.3 percent this year, owing to "persistently elevated inflation pressures" which is not giving enough room for policy stimulus. India grew at 6.5 percent in the financial year 2011-12.

In a research note, DB Research said the downward revisions largely reflect the effects of intensified euro- related uncertainty. It, however, maintained that global environment is not the sole reason for the downward revision.

Emerging markets are also facing these global economic concerns and the growth forecasts for China, and Brazil have also been marked down substantially for this year.

"In China and India, the slowdowns in response to past policy tightening have been greater than we had expected and the ensuing policy stimulus more timid than expected," the report noted.

DB Research further noted "in India's case this is due in particular to persistently elevated inflation pressures".     Retail price-based inflation for May, was higher at 10.36 percent, while, inflation, as measured by the Wholesale Price Index (WPI), stood at 7.25 percent in June as against 7.55 percent in May.

According to the report India's CPI inflation level is likely to be around 7.5 percent this year.

At this level, inflation will continue to be higher than other leading emerging market economies -- Brazil (5.1 percent in 2012), Russia (5 percent) and China (3 percent).

Meanwhile, the global CPI inflation rate is projected to slow significantly this year to 3.4 percent from last year's 4.5 percent, mainly due to a sharp easing of commodity price pressures.

Overall, the global economy is set to decelerate to 3.2 percent growth in 2012 and is likely to edge back up to 3.5 percent in 2013, but it would still fall far short of its pre-crisis trend of about 4 per cent, DB Research said.

Within the advanced economies, growth in the US is likely to pick up to "moderately above trend" in 2013 and the euro area would be the only region projected to be in recession this year and near recession in 2013, it said.

The report noted that "the worst should be over by later this year, with growth picking up modestly in 2013".


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