IMF lowered India’s growth forecast to 6.1%

               

                Indian economy has suffered another blow, as the International Monetary Fund (IMF) on Monday lowered the India’s growth forecast to 6.1% for the year of 2012. Global economic uncertainty and India’s slower aspect on proper economic reform may be the reasons behind it. The IMF is citing the slowing global economy quite regularly. In its latest update to the World Economic Outlook, the IMF also cut the growth estimate for India to 6.5% for the year of 2013. Eventually in its last outlook, which was announced in the month of April, it had forecast India’s growth at 6.8% for 2012 and 7.2% for 2013.

              “In the past three months, the global recovery, which was not strong to start with, has shown signs of further weakness. Financial market and sovereign stress in the Euro area periphery have ratcheted up, close to end-2011 levels. Growth in a number of major emerging market economies has been lower than forecast,” the IMF said in its latest update.

                Actually it is not the first time that India’s growth forecast have been lowered. Many reputed economists and several high rated agencies have already slashed India’s growth forecast in this year, considering lack of economic reforms and higher interest rates.

               “Growth momentum has also showed in various emerging market economies, notably Brazil, China and India. This partly reflects a weaker external environment, but domestic demand has also decelerated sharply in response to capacity constraints and policy tightening over the past years,” in its update the IMF also mentioned.