Friday, January 7, 2011

Indian economy to grow robustly with inflationary pressure: IMF

AN INTERNATIONAL Monetary Fund (IMF) report has said that the real gross domestic product (GDP) of India will grow at nearly nine percent during the period of April 2010 to March 2011 year on year, with high inflationary pressure, the International Monetary Fund (IMF) said in a report on Wednesday.

Masahiko Takeda, the IMF's mission chief for India, held that India's real GDP was predicted to grow at 8.75 percent in the period year on year, with robust growth supported by high investment in infrastructure and productivity gains.
India weathered the recent global financial crisis well, and since mid-2009 domestic demand had powered a vigorous recovery. The country's growth rate remained among the strongest in the world, the Washington-based agency said in its annual assessment of one of the world's fastest growing economies.

"With robust growth spurring elevated levels of inflation, India should speed up its return to pre-crisis monetary and fiscal policies to keep the economy in check," The Guardian quoted the IMF, as adding.

Partly due to the threat of rising food prices, India's inflation rate was currently in the range between 8.5 percent and 10.5 percent. Inflation was expected to come down slowly as last year's high food prices caused by poor rainfall drop out of the inflation calculation, but underlying price pressures were still strong, noted IMF economists.

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