IMF Projects India's GDP At 8% For FY11

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The International Monetary Fund or IMF has projected India's economic growth for the fiscal 2010-11 at 8%, and 6.7% for current fiscal. It attributed India's prompt fiscal and monetary easing along to fiscal stimulus of the government to the speedy recovery from global meltdown.

Although the agricultural output for the current fiscal is estimated to be less by 1% due to drought, the non-agricultural GDP growth is likely to increase. It foresees more jobs increasing private consumption.

Investments are likely to improve with boosting corporate profits, rising business confidence and favorable financing conditions. The acceleration pace of reforms and capital inflows also could raise investment.

The IMF said that with India's long-term prospects remaining strong and the private sector balance-sheets sound, it expected growth to be back at potential 8% in 2010/11, even if advanced economies grew below trend. It added that medium-term growth prospects remained bright.

It cautioned the main risks that India was facing were the rising inflation and the financing constraints arising out of ballooning fiscal deficit. It also included risks like asset price bubbles and a sudden halt in capital inflows caused by turmoil in global financial markets.

(Market News Provided by RTTNews)