Decoupling a misleading idea: IMF

Praising India for its macroeconomic policy and structural reforms, International Monetary Fund today said the country will grow at more than 8% (this year), which was "wonderful" considering there was forecast of a global slowdown.

"India's economic growth is due to good policy of the government and Reserve Bank. The country is benefiting from sound macroeconomic policy and structural reforms of the last 5-10 years," Dominique Strauss-Kahn, managing director, IMF, said while delivering a lecture at the Reserve Bank here.

Strauss-Kahn said the effects of the global financial crisis were serious, and IMF has reduced the forecast for global growth to 4.1% from 4.9%.

He said emerging market economies like India and China cannot remain immune from global crisis, which has complex linkages. "Decoupling is a misleading idea...The linkages between developed and emerging market economies are now much more complex than before," he said.

"There are large capital flows because of the wide interest rate differential, which pose policy challenges in managing liquidity," Strauss-Kahn said, adding there were signs of emerging markets being affected by financial turmoil.