IMF Reduced India’s Economic Growth Rate to 5.7 percent from 5.9 percent for 2013

International Monetary Fund (IMF) reduced the economic growth rate of India from its earlier prophecy of 5.9 percent to 5.7 percent for the year 2013, in its latest release, which has been published on 16^th April 2013 in World Economic Outlook (WEO).

The IMF slashed its projection for India established on the prominent essential challenges faced by India, which would decrease the promising output possessing inflation elevated by regional reasons. IMF also forecasted that the underlying Indian economy could recover following the information given by the Union and the improvement in external demands. All these depend upon a better monsoon season, solid consumption, external demand and improvement in policy making.

Generally Economic Growth Rate is the most important indicator of economic health. If it's growing, so will business, jobs and personal income. If it's slowing down, then businesses will hold off investing in new purchases and hiring new employees, waiting to see if the economy will improve.

It has to be mentioned here that the worst thing is India whose Economic growth is often said to be threatened by structural weaknesses in her infrastructure. So the Poor infrastructure hampers growth because it causes higher costs and delays for businesses, reduces the mobility of labour and hits the ability of export businesses to get their products to international markets.

IMF reduced the economic growth rate of global outlook too, which is 3.3 percent from 3.5 percent in January 2013, and the prediction of 0.3 percent was for the 17 nation of Euro-Zone. It has advocated to the policymakers of European nations to come up with aggressive monetary policies to pull out Euro zone from the crisis situation.

Growth Forecast by Union Government of India

The Union Government communicated the economic growth rate 6.2-6.7 percent for the fiscal year 2013-2014. Indian Government dependent on the factor of cost method to make the growth projection, while IMF makes the growth prediction depends on the estimates of Growth Domestic Product using market prices.

The latest account defalcation would be elevated at 4.9 percent against 5.1 percent in 2013, and the Consumer Price can increase to 10.8 percent from 9.3 percent. The current information released in context of India’s retail inflation showed moderated impact of retail inflation in March 2013.

IMF projected that India would grow at the rate of 6.2% in 2014. It projects the global economy to expand 4.1% in the 2014.

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