India’s growth rate to reach 9.5% next year: E&Y

India's economy is expected to grow at 6.8 per cent in calendar year 2012 - slower than an earlier forecast of 8 per cent - but the growth is expected to accelerate strongly in calendar year 2013 to touch 9.5 per cent, global audit and consulting firm Ernst & Young (E&Y) has said.

E&Y had pegged GDP growth for 2012 at 8 per cent in its first Rapid-Growth Markets Forecast (RGMF) released in October 2011.

"While growth in the current year has moderated, India's medium-to-long-term growth prospects remain intact," E&Y India partner and India markets leader Farokh Balsara said in a statement.

According to the latest RGMF released today, growth in India is expected to accelerate strongly in 2013 at 9.5 per cent as the global economy recovers, the impact of previous interest rate tightening wanes, investment increases and exports pick up.

An improvement in both domestic and external demand will feed the recovery in growth, it said.

E&Y said slackening demand, turbulent and volatile markets and credit liquidity problems in Europe are beginning to squeeze rapid-growth markets (RGMs) but not to the extent of derailing robust economic performance.

The RGMs are expected to grow collectively by 5.3 per cent this year, in stark contrast to the mild recession expected in the euro zone in this year and modest growth in the US, according the E&Y report.