The economy is likely to expand by 8.4 per cent in the current financial year, with the agricultural sector expected a bounce back in the year, a Ficci survey among economists said here on Friday.

According to the 12 economists who participated in the survey, agriculture and allied services are expected to grow by 4 per cent in 2010-11.

“Economists project agriculture and allied services to achieve a negative growth of 0. 2 per cent in 2009-10, but this performance is expected to look up in the current fiscal to 4 per cent,” the Ficci Economic Outlook Survey said. It said the services sector is likely to look up from 8.1 per cent to 9.3 per cent during the fiscal.

The survey, however, said the industrial growth is likely to look down with growth paring from 10 per cent in 2009-10 to 9.2 per cent in 2010-11.

Finance minister Pranab Mukherjee had exuded confidence that the GDP will grow by up to 8.75 per cent in this fiscal.

It said GDP growth is expected to clock 8.7 per cent in the last quarter of 2009-10 and further improve to 8.9 per cent in the first quarter of the current fiscal.

Ficci also expects further monetary tightening by the central bank in its monetary policy review on Tuesday. “We must be prepared for another round of monetary tightening by the RBI. Repo (rate at which it lends to banks) and reverse repo (interest it pays to banks on deposits) are expected to be hiked by 25 basis points each. CRR (amount banks park with RBI) could be hiked by up to 50 basis points,” it said.

It also said given the comfortable liquidity position in the system, a hike in policy rates by RBI is unlikely to be followed by an immediate hike in lending rates by banks.

The survey also said the private sector would raise more money from abroad as economists expects the investment cycle is gaining more and more strength.

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