New Delhi: International Monetary Fund (IMF)
on Thursday said India's economic growth rate will accelerate to 6.5
percent in 2010 on account of robust domestic demand and
rising private investment.
"India's growth is expected to accelerate to 6.5 percent
in 2010 from 5.33 percent in 2009, on the back of strong
domestic demand," the IMF said in its regional economic
outlook.
"In particular, the normalisation of financial conditions
is expected to support a rebound of private investment,
sustaining demand even as the fiscal stimulus wanes," it
added.
In its twice-yearly World Economic Outlook released in
Istanbul earlier this month, the Fund had pegged the economic
growth rate at 6.4 percent for next year.
The World Economic Outlook had projected India's growth
at 5.4 percent for 2009.
Earlier this week, RBI retained economic growth
projection at six percent with upward bias for 2009-10 in its
second quarterly review of monetary policy.
Even Prime Minister Manmohan Singh had recently said that
the Indian economy would grow by 6-6.5 percent in the current
fiscal despite being affected by the global financial crisis
and drought in the country.
On account of global financial meltdown, India's economic
growth slowed down to 6.7 percent during 2008-09, from over 9
percent recorded in the previous three years.
In the first quarter of the current fiscal, Indian economy
grew by 6.1 percent.
The IMF said emerging Asia, in particular China and India
are rebounding much more quickly that the western world.
It added that the economic recovery in Asia is faster than
the rest of the world and is projected to grow by 5.75 percent during 2010.
"The region (Asia) is out pacing other parts of the
world, with the "green shoots" of recovery appearing earlier
and taking firmer roots than elsewhere," the IMF said.
IMF forecasts suggest Asia will grow by 5.75 percent in
2010, higher than the 1.25 percent predicted for the G-7
economies, but short of the 6.66 percent average recorded for
the region over the past decade.
It added that the pickup in core inflation and inflation
expectations in India suggest that demand pressures are
already playing a role in pushing up inflation.
Inflation rose fastest in six months to stand at 1.51 percent for the week ended October 17, much in line with the
RBI's warning that inflationary pressures are building up in
the economy.
RBI, in its monetary policy has projected inflation to
touch 6.5 percent mark with upward bias by end of the current
fiscal.
Bureau Report
First Published: Thursday, October 29, 2009, 21:07