IMF sees growth dip to 6.9%, says reforms vital IMF sees growth dip to 6.9%, says reforms vital
The International Monetary Fund has lowered India’s growth forecast to 6.9 per cent for 2012 due to the slowdown in investment in the country. It had earlier said India will grow by seven per cent this year.
“The lowered growth outlook owes much to a slowdown of investment, which partly reflects structural factors... Apart from some financial reforms and measures to broaden the use of public-private partnerships announced in the 2012-13 Budget, the implementation of reforms related to infrastructure is likely to proceed slowly,” said the IMF’s Asia-Pacific Regional Economic Outlook report.
It said renewed efforts are needed in India to revive the flagging structural reform agenda. “These include measures to improve the investment climate, remove infrastructure bottlenecks and further expand education opportunities. It is also important for India to make progress in reducing barriers to trade in order to maximise the potential of its continuing demographic dividend,” the report noted.
Fiscal consolidation, it added, was the key to containing inflationary pressures and creating space for priority development needs in India. “Hence consolidation efforts should focus on limiting non-priority spending, including fuel-related subsidies, while providing more room for public investment in health and education.”
The IMF has, however, retained India’s growth estimate at 7.3 per cent for 2013. On China, it predicted the country will grow by 8.2 per cent in 2012.
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