NEW DELHI: India's quarterly economic growth figures due later Friday may show a slight pickup, but recovery will remain elusive owing to high interest rates that are crimping spending and investment, economists say.

Growth is forecast to accelerate to 4.6 per cent year on year in the July-September quarter, according to a market consensus estimate by Dow Jones Newswires. That figure would be up from growth of 4.4 per cent in the previous three months.

Economists believe the slightly better quarterly performance is due to improved exports thanks to a weaker currency and higher farm output from a bountiful monsoon.

But tighter fiscal policy and two recent interest rate hikes to curb stubbornly high inflation “will impact recovery in coming quarters”, said Barclays economist Siddhartha Sanyal.

Sanyal said he expects second-quarter growth of 4.6 per cent, but does not see any broad-based turnaround in an economy that was growing at near double-digits two years ago.

Still, any revival sign could provide a respite for the scandal-tarred Congress-led government which is desperate to steer the economy back into health before general elections due by May.

Even if growth edges up to around 4.6 per cent it will still be the fourth straight quarter of sub five-per cent expansion. The data will be released at 1200 GMT.

“Investment activity remains muted and consumption confidence has weakened,” noted ICRA Ltd, an associate of Mood's Investors Services, in a report.

Economic growth fell to a decade-low of five per cent in the fiscal year to March and while Delhi has forecast around 5.0-5.5 per cent expansion this financial year most economists expect it to be below that.

Hopes of a big increase in production for India's religious festival season in October, when it is considered auspicious to buy everything from cars to gold to electronic appliances, failed to materialise this year.

With inflation still stubbornly high at seven per cent, Goldman Sachs has forecast more interest rate hikes, which would keep growth subdued.

The investment house predicts the bank's new governor, Raghuram Rajan, will hike India's benchmark lending rate to 8.5 per cent next year from its current 7.75 per cent.

Rajan has made tackling inflation, fuelled by a host of factors from costlier imports to supply bottlenecks in India's antiquated industrial and distribution sectors, a top priority.

Finance Minister P. Chidambaram, meanwhile, has said he is intent on cutting the fiscal deficit to a six-year low of 4.8 per cent of gross domestic product this financial year, implying a rowback in public spending that would slow growth.