New Delhi: Prime Minister's Office on September 26 said it was confident that the country would be able to record 6.5 per cent economic growth during the current financial year, but expressed concern over rising fiscal deficit and sharp appreciation in the Rupee.

"After October, we will see the impact of monsoon on growth. We will see demand pick up and take GDP (Gross Domestic Product) growth to 6-6.5 per cent," Narayan, the Economic Advisor to the Prime Minister, said at a meeting organised by the American Chamber of Commerce.

He said good monsoon was likely to have a favourable impact on agriculture while sectors like two- wheelers and white goods have also projected good sales in the third quarter.

"We are seriously concerned that there is a dent in export growth due to the appreciating Rupee," Narayan said adding that the forex reserves were strong at about $ 88.5 billion.

Highlighting mounting fiscal deficit as a major problem at the Centre and the states, Narayan said several steps like instruments of debt swapping, power sector reforms, NPA (Non-Performing Assets) norms and Corporate Debt Restructuring have been taken to contain the fiscal deficit.

The World Bank had warned India of staggering fiscal deficit at the Centre and states, which amounted to 11 per cent of GDP.

He said the financial sector was much "healthier" now, which was reflected in increasing profits of companies.

PTI