By NNN-PTI,
Washington : India’s growth is likely to slowdown to 6.25 per cent in 2008-09 on falling corporate investment and deteriorating global outlook, the International Monetary Fund has said.
Partly reflecting the deteriorating global outlook, IMF, which concluded its India consultations on March 6, in a statement projected Indias growth to moderate to 6.25 per cent in 2008-09 and further to 5.25 per cent in 2009-10.
However, India has forecast growth at 7.1 per cent for 2008-09.
The Fund said corporate investment, the major growth driver during recent years, is expected to slow because of weakening profitability and confidence, and tightening of financing conditions from foreign and nonbank sources.
In a statement, the world body said policy measures to stimulate Indian economy and a good harvest should support domestic demand.
“The uncertainty surrounding the forecast is unusually large, with significant downside risks. The main upside risk stems from a larger-than-anticipated impact of the stimulus measures that the authorities have already implemented.” After last years record of 9.2 per cent of GDP, the IMF said the capital inflows are expected to decline this fiscal year. Till December 2008 portfolio investment recorded a US USD 11 billion outflow.