IMF pegs 2010-11 growth at 8 per cent

The International Monetary Fund expects the Indian economy to grow by 8 per cent during 2010-11,though high inflation and rising fiscal deficit would continue to remain areas of concern.

The International Monetary Fund (IMF) expects the Indian economy to grow by 8 per cent during 2010-11,though high inflation and rising fiscal deficit would continue to remain areas of concern.

With Indias long-term prospects remaining strong and private sector balance sheets sound,we expect growth to be back at potential in 2010-11 even if advance economies grow below trend, IMF said in its latest paper issued after consultation with Indian authorities.

The Fund,however,forecasts a moderately lower growth rate for the 2011-12 fiscal at 7.7 percent. For the current fiscal,the fund said the economy would grow by 6.7 per cent,much lower than the 7.2 per cent projected by the CSO. The major areas of concern,according to IMF,are the rising inflation and high fiscal deficit. On the downside,the main risks are elevated inflation and financing constraints…arising from the fiscal deficit,which could stall the recovery, the paper said. WPI was at 9.89 per cent in February,much higher than the RBIs March-end projection of 8.5 per cent.