Interest rate effect - Infrastructure growth falls to 5.2%

High interst rate has started showing its colors on the infrastructure and overall growth of the economy. As per the data released on 1st June the growth of the six core infrastructure industries in April had fallen to 5.2%. In March 2011 the infrastructure growth was 7.4%.

Yesterday the GDP growth numbers were reported as 7.8% way below the street estimates.

RBI has increased interest rates by 300 basis points in last 1 year and the market is expecting another round of 25 bps rate hike on 16th June by RBI.

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