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India to grow 7.7% as global recovery picks pace: IMF

With the global recovery off to a stronger start, Indian economy is projected to grow at 7.7 per cent in 2010, 1.3 percentage points higher than forecast earlier, the International Monetary Fund (IMF) said.

business Updated: Jan 26, 2010 23:23 IST

The Indian economy would grow by 7.7 per cent in 2010 with the global economy, battered by two years of crisis, is recovering faster than previously anticipated, the International Monetary Fund (IMF) said on Tuesday.

But the recovery is proceeding at different speeds around the world, with emerging markets, led by Asia relatively vigorous, but advanced economies remaining sluggish and still dependent on government stimulus measures, the IMF said in an update to its World Economic Outlook.

India’s growth projection is 1.3 percentage points higher than the forecast in October when it said the economy would grow by 6.4 per cent in 2010.

In 2011 the Indian economy would grow a tad faster at 7.8 per cent, the IMF said.

“For the moment, the recovery (in the world economy) is very much based on policy decisions and policy actions. The question is when does private demand come and take over. Right now it’s ok, but a year down the line, it will be a big question,” said IMF chief economist Olivier Blanchard.

Planning commission deputy chairperson Montek Singh Ahluwalia said India is on course returning to a nine per cent growth trajectory in the next two years.

“In the last year of the 11th plan period, 2011-12, we hope to get back to nine per cent growth,” Ahluwalia told industry delegates in London.

The economy grew 7.9 per cent during July-Sept — its strongest in six quarters — on the back of higher consumer spending and private investment.