IMF’s World Economic Outlook Update hews down India’s growth forecast to 6.1%
The International Monetary Fund (IMF) in its World Economic Outlook Update, chopped down India’s economic growth projection from 6.8 % to 6.1% in 2012.
This is the result of slowdown in external demand and deceleration in domestic demand. The slow in domestic demand has been attributed to capacity constraints and monetary tightening by RBI.
It also cut the 2013 gross domestic product (GDP) growth estimate as well to 6.5 % from 7.2 % projected earlier as it didn’t see the situation to ameliorate significantly by 2013.
The IMF also noted the slowdown in the economies of Brazil, China, and India.
As per Fund, several burgeoning market economies had also been affected by increases in investor-risk aversion and perceived growth uncertainty, which has led to equity price fall, capital outflows and currency depreciation.
IMF uses different procedure to gauge economic growth against the official Indian method. India determines its growth at real GDP at factor cost (excluding indirect taxes), IMF projects it at GDP at market prices (including indirect taxes).