Mumbai, Jan 28 (IANS): India's economic growth will slip below 5 percent in the financial year ending March 2014 and may accelerate to 5.5 percent next fiscal, the Reserve Bank of India (RBI) said Tuesday.

Addressing a media conference after the release of the third quarter review of the monetary policy, RBI Governor Raghuram G. Rajan said the economic growth in 2014-15 will remain between five to six percent, "most probably around 5.5 percent".

The RBI hiked key policy interest rates by 0.25 percent, a move that would further dampen the economic growth, lingering at a decade low.

India's gross domestic product (GDP) growth slumped to 4.6 percent in the first half of the current financial year, the worst performance in over a decade.

"If policy actions succeed in delivering the desired inflation outcome, real GDP growth can be expected to firm up from a little below 5 percent in 2013-14 to a range of 5 to 6 percent in 2014-15, with risks balanced around the central estimate of 5.5 percent,” the RBI governor said in the policy review.

"A pick-up in investment in an environment in which external demand continues to be supportive of export performance could impart an upside to this forecast,” he said.

Rajan emphasised that the central bank's action on rate hike should not be seen as anti growth.

“We need to bring inflation down. The best way for us to sustain growth over a medium term is to bring inflation down,” he said.

The RBI governor said the central bank is "fostering growth through steady reforms".

"The slowdown in the economy is getting increasingly worrisome. Our current assessment is that growth is likely to lose momentum in Q3 of 2013-14, with industrial activity in contractionary mode, mainly on account of manufacturing," he said.