The Indian economy would grow by a slower 7.8% in 2011, the International Monetary Fund (IMF) said on Tuesday in its latest growth outlook confirming fears mirrored in a slew of recent domestic data releases amid strong signs of deceleration in the global economy.
The latest estimates are lower than the 8.2% growth the multi-lateral lending institution had projected in June. India’s gross domestic product (GDP) would grow at an even slower 7.5% in 2012, lower than 7.8% it had forecast three months ago.
India’s economy grew 8.5% in 2010-11 and by 7.7% during April to June, the slowest in six quarters reflecting signs of a slowdown as rising input costs and costlier borrowing squeeze corporate profitability.
“The global economy is in a dangerous new phase. Global activity has weakened and become more uneven, confidence has fallen sharply recently, and ` risks are growing,” the IMF said in its September 2011 World Economic Outlook.
The global recovery is slowing, with world growth projected at 4% in 2011 and 2012, down from over 5% in 2010, it said.