At a time when every day brings in gloomy tidings, the Prime Minister’s Economic Advisory Council (EAC) has cheerful news. It has estimated the Indian economy will grow by 7.5% in 2009-10 ( see Page 4 ). It has pinned its hopes on inter-national growth reviving from mid-2009, something it feels will?boost?the?Indian?economy.
The projection, released on Friday, is in marked contrast to the pessimism displayed by the International Monetary Fund (IMF) and the World Bank. In a recent interview to BBC, IMF managing director Dominique Strauss-Kahn had painted a bleak economic outlook for the world.
He said IMF would issue a downward growth forecast for the world economy. Strauss-Kahn mentioned a cut of 0.5-1% in global growth from IMF’s earlier estimates. India, China and Brazil, he said, would “experience very slow growth”. The world would not begin recovery before 2010.
EAC has issued a forecast that is not only unrealistically optimistic, but its timing of the recovery too seems to be way off the mark.