IMF Projects India To Grow By 8 Percent Next Fiscal (04-Feb-2010)
The International Monetary Fund (IMF) stated that even if the developed world remains slow, the Indian economy will grow by 6.75% this fiscal and return to its pre-crisis level of 8% next year.
However, due to the drought, agriculture is expected to decline by about 1% in 2009-10 but non-farm GDP growth is likely to garner speed.
Timely fiscal and monetary easing, fiscal stimulus and the return of risk appetite in financial markets, have brought growth close to pre-crisis levels.
Meanwhile, IMF said that even if advanced economies grow below trend, with India''s long-term prospects strong and private sector balance sheets sound, they expect growth to return at potential in 2010-11.
IMF''s conservative estimate came after the RBI projected 7.5% growth in this fiscal, higher from its earlier estimate of 6%, in its quarterly monetary policy review.
Moreover, RBI upped its growth projection after the economy rose by 7.9% in Q3 of 2009.
On the other hand, the finance ministry''s mid-term review of the economy gave a positive projection of 7.75% for the current fiscal.
Previously, the International Monetary Fund (IMF) warned that fiscal sustainability is going to be a massive problem in the coming years, with many countries piling up huge debts due to the global crisis.
Many developed and developing nations came up with huge stimulus measures to boost their respective economies in order to deal with the raging financial chaos.
The International Monetary Fund stated that the global economy was on the edge to grow more strongly than previously expected in 2010, by 3.9%.
The IMF said that with slow revival in advanced economies due to relatively strong growth in emerging and developing economies, the growth forecast was 0.8% higher than the 3.1% estimated 4 months ago.
Moreover, it was said that according to a statement made by the International Monetary Fund (IMF) which expressed its concern regarding the global economy, stated that though the world economy is weak at present but is giving a good fight to the financial crisis and recovering at faster rate than the expectations made.
Mr. Dominique Strauss-Kahn, Managing Director of IMF said later this month in an update of the IMF''s World Economic Outlook, the IMF would disclose more optimistic growth forecasts.
However, earlier, although the IMF sees no major threat of asset price bubbles, the head of the International Monetary Fund (IMF) has cautioned against excessive capital inflow in some Asian countries.
IMF managing director Dominique Strauss-Kahn stated that the backward flow of money could cause problems to the recovering economies.
He said that there is trouble in having too big capital inflows coming to some countries and sometime for some reasons, this can have an unexpected end and this create difficulties.
Meanwhile, it was said that the global economy is recovering faster than expected but growth continues to be fragile as many of the developed nations are still dependent on government stimulus, the International Monetary Fund has said. The revival is led by emerging markets, especially those in Asia, whereas most of the advanced economies are witnessing sluggish recovery.
IMF managing director Dominique Strauss-Kahn has said the global economy is recovering significantly faster than expected, but growth in most advanced economies is still dependent on government stimulus measures and remains fragile. He noted that while emerging market economies, mainly in Asia, are leading the recovery, many developed countries are still seeing weak private demand and rising job losses.
The International Monetary Fund (IMF) is an international organization that oversees the global financial system by following the macroeconomic policies of its member countries; in particular those with an impact on exchange rates and the balance of payments. It is an organization formed with a stated objective of stabilizing international exchange rates and facilitating development
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