Jaitley says higher rainfall forecast could mean faster growth

WASHINGTON (Reuters) - India may grow at a faster pace this year if the latest predictions of higher rainfall in the country this year hold up, Finance Minister Arun Jaitley said on Wednesday.

"I have seen in the last two or three days the predictions seem to be much kinder to us this year, and if that were to happen, we are capable of…improving upon our growth rate," Jaitley said in a speech on the nation's growth prospects at a Carnegie Endowment for International Peace event in Washington.

India is currently expected to grow 7.5 percent this year and next, according to the International Monetary Fund.

Latest forecasts predict above-average rainfall in India this year. A good monsoon season is important to farm output in India, the world's second-biggest producer of rice, wheat, sugar and cotton.

Shares rose nearly 2 percent on Wednesday to their highest level in more than three months as easing inflation and the rainfall forecast bolstered expectations of higher economic growth and more rate cuts by the nation's central bank.

Jaitley is in Washington this week for the IMF and World Bank's semi-annual meetings. A meeting of the G20 major economies is also due to take place.

(Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci)