IMF chief describes India as economic power house

IMF chief describes India as economic power house

New Delhi: IMF managing director Dominique Strauss-Kahn on Thursday described India as a “leading power" and an “economic powerhouse" going by the performance of the economy.

“Your result here in terms of economic growth and also in terms of inclusive growth are really amazing," he told reporters after a meeting with finance minister Pranab Mukherjee.

“We had a very fruitful discussion and relationship between India and the IMF is expanding," he said on the meeting with Mukherjee.

“India is becoming one of the leading power in the world. It is really an economic powerhouse," he said.

“Your result here in terms of economic growth and also in terms of inclusive growth are really amazing."

“The forecast we had in the IMF is exactly what you are following now which is probably the maximum that the Indian economy can provide these days. So you are running as fast as you can," he said.

IMF has projected Indian economy to grow by 9.7% in 2010 though it uses a different methodology for its calculation.

India, which uses different computation for calculating GDP than IMF, however, expects the economy to grow by 8.5% this fiscal.

The IMF chief said higher economic growth than what is being witnessed by India may lead to risks of inflation and high current account deficit in the country.

Strauss-Kahn said he favoured new heads of the World Bank and the Fund to be from countries other than Europe and the US.

This comes in the backdrop of reports that Planning Commission deputy chairman Montek Singh Ahluwalia may be in the race for IMF chief.

“Let us be candid. I think the so called agreement between the US and European whereby the IMF head was European and World Bank President was an American is over.

“So I think it would be just fair that the next leaders of the two institutions will come from somewhere else in the world," Strauss-Kahn told reporters here in reply to a query on the issue.

Strauss-Kahn, who served as the minister of economy, finance and industry of France, however, said this did not mean that Europeans would be forbidden to lead the IMF for ever.

The New York Times had earlier reported that Ahluwalia is among the probables to succeed Kahn in the IMF.

The report said the clout and role of the international lender has increased substantially in the emerging markets.

“Whatever he (Kahn) decides, his successor is likely to be someone from the developing world.

“Frequently mentioned names include Mohamed A El-Erian, the American-born son of an Egyptian diplomat and an economist who leads the giant bond investor Pimco; Montek Singh Ahluwalia, a senior Indian planning official; and Arminio Fraga and Guillermo Ortiz, former heads of the central banks of Brazil and Mexico respectively," the daily had said.

Strauss-Kahn was talking to reporters after a luncheon meeting with Finance Minister Pranab Mukherjee and his ministry officials.