Economic rebound to start towards year-end for India, says IMF

Economic rebound to start towards year-end for India, says IMF
The Financial Express, May 6, 2009, Page 2

New Delhi, (PTI)

Multilateral agency International Monetary Fund today said, the Indian economy, facing slowdown amid global financial slowdown is expected to rebound near the end of the current calendar year.

"For India, we expect growth to slow markedly in 2009 before starting to rebound toward year end," the IMF said in its latest 'Regional Economic Outlook: Asia and Pacific'.

The IMF, which recently slashed its 2009 GDP forecast for India to 4.5 per cent from 5.1 per cent estimated earlier, said its fourth quarter (October-December 2009) outlook is 4.8 per cent.

On the coutry's slow growth in 2009, it said despite India's relatively low dependence on exports, the country will be particularly affected by the financial shock.

"... Because the strong investment growth in recent years owed much to favourable credit conditions. With external financing having tightened and the domestic credit cycle having turned, investment growth is expected to be severely curtailed, and so is GDP growth," IMF said.

The multilateral agency said the last quarter of the next year is also expected to be higher than the overall growth in the full year 2010.

According to IMF, India's GDP is expected to grow at 5.6 per cent in 2010, lower than prior projection of 6.5 per cent, and the view for the fourth quarter (Oct-Dec) of 2010 is 5.9 per cent.