Indian economy will likely grow in the range of 5.5-6.5 per cent in the current financial year, as against of average growth of 3.9 per cent last year, global rating agency Moody's Investors Service predicted.

Moody's said that Indian economy would see an increase in growth in 2013 even though the finance ministry's steps for new investments remained relatively small in scope.

The global rating agency cited relatively high inflation and cautious private sector, and pointed out that Indian economy was struggling to see a boost in investment.

As per Moody's estimates, the growth will improve further to 6-7 per cent in the next financial year.

Revealing its estimates, the rating agency said, "While GDP growth is likely to pick up during 2013, it will probably take at least another year or two before the economy matches the pace of expansion seen during
2010 and 2011."

Moody's also expressed concerns over inflation. It noted that CPI inflation remains in double digits, despite the recent fall in wholesale price inflation (WPI).

Moody's also cautioned that slower-than-expected economic growth emerging markets like China, Brazil and India would be a serious threat to the global economic recovery.