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IMF lowers growth outlook

Washington, Sept. 20 (PTI): The International Monetary Fund (IMF) expects India’s economic growth rate to moderate to 7.5-7.75 per cent this fiscal from 8.5 per cent in 2010-11 on account of slowing investments and sluggish global recovery.

“In India, growth is forecast to average 7.5 to 7.75 per cent during 201112. Activity is expected to be led by private consumption,” the IMF said in its World Economic Outlook.

The report was released ahead of the annual meetings of the IMF and the World Bank, which will be attended by finance minister Pranab Mukherjee.

Investment, according to the outlook, “is expected to remain sluggish, reflecting, in part, recent corporate sector governance issues and a drag from the renewed global uncertainty and less favourable external financing environment”.

The IMF said that controlling inflation continued to remain a major challenge for India and despite a series of rate hikes by the central bank, credit growth still remained strong.

It said the emerging economies had borne the brunt of the global economic crisis. China’s GDP growth will average 9-9.5 per cent in 2011-12 mainly on account of policy tightening.

Global forecast

Portraying a gloomy outlook for the global economy, the IMF said it was in a dangerous phase as business activity had weakened and confidence had fallen sharply. Global growth will moderate to about 4 per cent through 2012 from over 5 per cent in 2010, the IMF said.

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