The GDP figures for the December quarter to be announced today are expected to be weak

Mumbai: Economists are predicting that the Gross Domestic Product (GDP) data for the December quarter of the current financial year to be released tomorrow will be weak. Due to weak demand and increase in repo rate by the Reserve Bank of India, the economic growth rate is likely to be affected.

The Reserve Bank has been aggressively increasing interest rates since May last year. In the last ten months, the Reserve Bank has increased the repo rate by 2.50 percent to 6.50 percent. Interest rates are increased to bring down inflation.

While inflation is still high, the possibility of an interest rate hike in the upcoming meetings is not ruled out. According to a survey conducted by a news organization, it has been concluded that the economic growth rate of the country is slowing down.

Demand dampening due to higher interest rates is having an impact on business activities, an economist said. He expected the economic growth rate of December quarter to be below five percent.

An official of SBI, the country's largest public sector bank, has predicted GDP growth of 4.60 percent in the December quarter.

He added that high frequency indicators of trading activity do not seem strong.

Export demand for the country's goods has also slowed in recent months, which has had a direct impact on the manufacturing sector. Due to increase in interest rate by many central banks of the world, the demand abroad is decreasing.