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India cuts growth outlook to gloomy 5 percent

MUMBAI, India (AP) -- India's government has forecast a slowdown in economic growth to 5 percent in the fiscal year ending in March, the worst performance in a decade for Asia's third-largest economy.

The gloomy projection released Thursday for 2012-13 is down from 6.2 percent growth in the previous year. Even that is far below the rate of expansion that India needs to provide enough jobs for its exploding youth population.

India is struggling with high inflation, stalling consumption and high interest rates as well as a wide fiscal deficit and weakening currency.

While the Congress party-led government is promising financial reforms in the next budget due at the end of February, the prospect of populist policies ahead of elections due next year has spooked investors.