New Delhi: Attributing the slower 8.9 per cent economic growth in the second quarter to sluggishness in manufacturing sector, Finance Minister P Chidambaram today said he believes GDP will grow close to nine per cent in 2007-08.

"There is turbulence in the international markets, there is slowdown in world output, we have adopted a tight monetary stance. The commodity prices are high, crude oil prices are high. All this points to some moderation... But I am quite confident that economic growth this fiscal will be pretty close to nine per cent," he told reporters here. He said rupee appreciation had also affected GDP growth to the extent it affected exports.

However, rupee has appreciated only against the dollar, and there has been zero rupee appreciation against the Euro, he added. Declining to comment on whether exports target of $160 billion would be achieved this year, he said the government was committed to provide all support to export sector "within affordable limits."

On whether monetary stance could be softened after fall in inflation, the Finance Minister said inflation is expected to remain at the current rate. Inflation for the week ended November 17 stood at 3.21 per cent. Exuding confidence in the revival of agriculture, he said: "Wheat production is expected to be one million tons higher than the previous year. With agriculture growth rate touching 3.6 per cent in second quarter, agriculture growth is expected to remain close to the target of 4 per cent."

Source : PTI