By Nikunj Ohri and Manoj Kumar
NEW DELHI (Reuters) -The World Bank on Tuesday maintained its forecast for India's economic growth for the current fiscal year that started on April 1, saying the South Asian economy continued to grow rapidly despite challenging global conditions.
The World Bank kept its growth forecast for India at 6.3%, after it lowered it during its April review.
During the April-June quarter, India's economy grew 7.8%, its quickest pace in a year, buoyed by strong services activity and robust demand. India's Chief Economic Adviser V. Anantha has projected growth of 6.5% for the full year.
Retail inflation moderated to 6.83% in August but remained above the upper end of the central bank's target band for a second consecutive month.
The World Bank warned food-price driven inflation could dampen consumption but private investments and government spending are likely to be robust.
"Higher prices are there. Naturally, you would expect consumption to come down," said Dhruv Sharma, India economist at the bank. But he added that the "overall conditions are still quite conducive for things like private investment, investment overall."
To tame inflation the Indian government has taken a number of supply side measures including an export ban on non-basmati rice and a 20% duty on exports of parboiled rice.
"I think these measures are going to be effective, although they're not necessarily measures to be recommended in normal times," said Auguste Kouame, country director at World Bank.
World Bank said the overall South Asia economy is expected to grow by 5.8% in 2023, which is slower than its pre-pandemic pace and not fast enough to meet its development goals.