IMF raises India 2009 growth forecast to 5.4%

The International Monetary Fund (IMF) today raised India's growth forecast to 5.4 per cent for 2009 even as it projected the world economy to shrink by 1.4 per cent this year.

The multilateral lending agency in April forecast a growth rate of 4.5 per cent for the Indian economy in 2009.

In its update to the World Economic Outlook, IMF said the global economy will contract by 1.4 per cent this year. Earlier it had projected a growth rate of 1.3 per cent for the same.

India is expected to witness a growth rate of 5.4 per cent in 2009 while neighbouring Chinese economy would expand by 7.5 per cent during the same period. The forecast for China has been revised upwards from 6.5 per cent in April, it said.

"The global economy is beginning to pull out of a recession unprecedented in the post–World War II era, but stabilisation is uneven and the recovery is expected to be sluggish," IMF said.

According to the multilateral lending agency, growth projections in emerging Asia have been revised upward to 5.5 per cent in 2009 and 7 per cent in 2010.

The Indian economy is projected to expand at a rate of 6.5 per cent in 2010 while the world GDP is anticipated to grow by 2.5 per cent.

Meanwhile, IMF projects the US economy to contract by 2.6 per cent this year, which is a revision from a negative growth projection of 2.8 per cent in April.

The agency said that emerging and developing economies are projected to regain growth momentum during the second half of 2009.

"Low-income countries are facing important challenges of their own because official aid has fallen and these economies are particularly vulnerable to swings in commodity prices," it added.

The report pointed out that advanced economies are projected to decline by 3.8 per cent in 2009 before growing by 0.6 per cent in 2010.