Washington: Dismissing fears of global financial contagion impacting India, the International Monetary Fund or IMF has said that the country’s economy will continue to perform well.
“Overall, we see the Indian economy continuing to perform well,” said Oliver Blanchard, Economic Counselor and Director of International Monetary Fund Research Department recently.
Pointing out there will be some impact of the tighter global liquidity conditions on India, he said, “We don’t see major drag from this impact on the country.”
According to the projections made by the World Economic Outlook (WEO) released recently by the IMF, India is likely to register a Gross Domestic Product (GDP) growth of 7.9% in 2008-09, which may slip to 6.9% in 2009-10.
“We are projecting that the growth in India will come down from 8% in 2008 to 7% in 2009. But 7% is still a strong rate of growth,” the IMF official said.
A likely 7% growth rate at a time when the world economy is on a downhill path, would reflect India’s internal growth dynamics, he said.
Giving reasons for relatively mild impact on India of the ongoing financial turmoil, Blanchard said, “India is still largely a closed economy, has strong internal growth dynamics, from rapid productive growth, from its process of integration into the global economy that is still continuing”.
India has registered a growth of 9% during 2007-08 and according to Prime Minister Manmohan Singh it is likely to register a growth of 7.5-8% during the current financial year.