Aug. 15, 2005 -- India's industrial production posted its highest growth in a decade Friday as inflation fell to a two-year low, leading analysts to forecast economic expansion of 7.5 to 8.0% this year.

Annual industrial output grew by 11.7% in June, the fastest clip in nearly 10 years, as India's increasingly affluent consumers bought new cars, refrigerators and other manufactured goods. Industrial production grew by 7.3% in the same month a year earlier.

The government has targeted growth of 7% for this fiscal year. Last year, India's economy grew by 6.9% after patchy monsoon rains hit farm output. But the year earlier it notched up growth of 8.2%.

In other good economic news, inflation hit its lowest level in two years, slipping to 3.84% for the week ended July 30 from 4.07% the previous week and 8.02% a year ago, helped by lower food prices. The fall came despite a surge in global oil prices. State-run firms have shielded domestic consumers by absorbing most of the rise in international prices but government officials have said a rise in domestic oil prices may be near to offset losses suffered by those firms.

Copyright Agence France-Presse, 2005