NEW DELHI (AP) - India's economy is likely to grow by 7.2 per cent in the current fiscal year despite rising world oil prices and U.S. interest rate hikes, a private industry report said Sunday.

Growth of more than seven per cent in 2005-06 would make India the world's second-fastest growing economy, after China, for the second consecutive year. Last year, India's economy expanded at 8.5 per cent, its highest in 15 years.

The report by the Confederation of Indian Industry, a group of the country's top private businesses, cited growth in the industrial and services sectors, a positive outlook for agriculture and broad-based export increases as reasons for the high growth figure for the country's fiscal year that ends next April.

The agricultural sector was expected to grow by three per cent, industry by 8.1 per cent and the services sector by 8.3 per cent in 2005-06, the report said.
The government expects economic growth to be around seven per cent during the year.

The report said India's economic growth would have been higher if it weren't for high international oil prices and rising U.S. interest rates.