ID :
51202
Wed, 03/18/2009 - 16:44
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Shortlink :
https://www.oananews.org//node/51202
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India`s economy is slowing: IMF
Lalit K Jha
Washington, Mar 18 (PTI) India's growth is likely to
slowdown to 6.25 per cent in 2008-09 on falling corporate
investment and deteriorating global outlook, the International
Monetary Fund has said.
Partly reflecting the deteriorating global outlook, IMF,
which concluded its India consultations on March 6, in a
statement projected India’s growth to moderate to 6.25 per
cent in 2008-09 and further to 5.25 per cent in 2009-10.
However, India has forecast growth at 7.1 per cent for
2008-09.
The Fund said corporate investment, the major growth
driver during recent years, is expected to slow because of
weakening profitability and confidence, and tightening of
financing conditions from foreign and nonbank sources.
In a statement, the world body said policy measures to
stimulate Indian economy and a good harvest should support
domestic demand.
"The uncertainty surrounding the forecast is unusually
large, with significant downside risks. The main upside risk
stems from a larger-than-anticipated impact of the stimulus
measures that the authorities have already implemented."
After last year’s record of 9.2 per cent of GDP, the IMF
said the capital inflows are expected to decline this fiscal
year. Till December 2008 portfolio investment recorded a US
USD 11 billion outflow.
External commercial borrowing has slowed considerably,
though there has been a mild recovery in portfolio investment
since October 2009 and foreign direct investment (FDI) has
held up relatively well, it said Tuesday.
Even as the reserves have declined this fiscal year, from
a historic peak of USD 315 billion in May 2008 to USD 252
billion as of February 6, 2009, IMF said the reserves remain
adequate compared to India's gross financing requirement and
imports.
The Fund said as a result of the global crisis, in 2008,
the stock market index declined by over 50 per cent and the
rupee depreciated 23 per cent versus the US dollar and 13 per
cent in nominal effective terms.
"The real effective exchange rate depreciated by 10 per
cent and is in line with its equilibrium value," it said. In
early 2009, however, the rupee and the stock market have
stabilised somewhat, it added. PTI
Washington, Mar 18 (PTI) India's growth is likely to
slowdown to 6.25 per cent in 2008-09 on falling corporate
investment and deteriorating global outlook, the International
Monetary Fund has said.
Partly reflecting the deteriorating global outlook, IMF,
which concluded its India consultations on March 6, in a
statement projected India’s growth to moderate to 6.25 per
cent in 2008-09 and further to 5.25 per cent in 2009-10.
However, India has forecast growth at 7.1 per cent for
2008-09.
The Fund said corporate investment, the major growth
driver during recent years, is expected to slow because of
weakening profitability and confidence, and tightening of
financing conditions from foreign and nonbank sources.
In a statement, the world body said policy measures to
stimulate Indian economy and a good harvest should support
domestic demand.
"The uncertainty surrounding the forecast is unusually
large, with significant downside risks. The main upside risk
stems from a larger-than-anticipated impact of the stimulus
measures that the authorities have already implemented."
After last year’s record of 9.2 per cent of GDP, the IMF
said the capital inflows are expected to decline this fiscal
year. Till December 2008 portfolio investment recorded a US
USD 11 billion outflow.
External commercial borrowing has slowed considerably,
though there has been a mild recovery in portfolio investment
since October 2009 and foreign direct investment (FDI) has
held up relatively well, it said Tuesday.
Even as the reserves have declined this fiscal year, from
a historic peak of USD 315 billion in May 2008 to USD 252
billion as of February 6, 2009, IMF said the reserves remain
adequate compared to India's gross financing requirement and
imports.
The Fund said as a result of the global crisis, in 2008,
the stock market index declined by over 50 per cent and the
rupee depreciated 23 per cent versus the US dollar and 13 per
cent in nominal effective terms.
"The real effective exchange rate depreciated by 10 per
cent and is in line with its equilibrium value," it said. In
early 2009, however, the rupee and the stock market have
stabilised somewhat, it added. PTI
