New Delhi, Oct. 11 -- External shocks remain the biggest threat to India's economic growth outlook, while rising and broadening inflationary pressures could push interest rates higher, according to Prof. N. R. Bhanumurthy, Director, Madras School of Economics.

Speaking to ANI in an interview, Bhanumurthy noted, inflation has been rising over the past two to three months and is becoming increasingly broad-based, making the Monetary Policy Committee's (MPC) assessment of potential inflationary pressures in the coming months largely expected.

"We are going to see upward trend in the interest rate cycle," he said.

Noting that India's biggest challenges currently stem from external factors, he highlighted, India has faced several external s...