New Delhi: Economic think-tank National Council for Applied Economic Research (NCAER) today (Jan 20, 2004) revised upwards the gross domestic product (GDP) growth forecast to 7.98 per cent in 2003-04 from its earlier projection of 7.0 per cent.

"The growth in GDP is expected to reach nearly 8.0 per cent during this fiscal year," NCAER said in its monthly report 'MacroTrack' released today.

The revision in the GDP forecast comes after the economy logged a whopping 8.4 per cent growth in the second quarter and 7.0 per cent in the first half of this fiscal.

The high 7.98 per cent growth in economy would come mainly due to a 10.7 per cent growth in agriculture, while industry is slated to log 7.0 per cent and services 8.31 per cent, it said.

"Higher growth in industry is driven by higher investment and higher demand arising from income growth due to rise in GDP originating from agriculture," NCAER said.

Although GDP growth will be higher, NCAER warned that fiscal deficit of the Centre is likely to be higher at about 5.82 per cent.

On the external sector, it said exports are slated to grow by 10.46 per cent while imports will log 20.25 per cent.

"The current situation with relatively much stronger Rupee against the US Dollar will lead to a trade deficit of 2.0 per cent. The current account deficit will remain marginally positive," NCAER said.

The agency also said the inflation rate was expected to be 4.9 per cent, which is significantly higher than 3.77 per cent predicted earlier.