IMF unlikely to up Indias growth forecast

The International Monetary Fund (IMF) will come out with its revised forecast of India's economic growth for 2007 on 17 October along with the World Economic Outlook (WEO). However, IMF is unlikely to revise upwards its present gross domestic product (GDP) growth forecast of 9% for the year feel analysts.

In its report released earlier this April, the UN body had projected a GDP growth rate of 8.4% for calendar year 2007. IMF revised its forecast to 9% for India in the July economic outlook update. The global growth forecast was also revised upwards from 4.9% in April, to 5.2%.

"IMF has consistently been more optimistic than other forecasters, particularly the investment banks," said Joshua Felman, senior resident IMF representative in India. However, he declined to comment on whether the present projection would be revised upwards further.

Analysts feel the upward revision is unlikely. "IMF has been quite optimistic about India's growth. I think their projection will hover around 9% for 2007," said an economist with a research institute.

IMF's growth projection is not comparable with the projections of some other national and international agencies like UNCTAD, ADB, RBI and NCAER as the former releases forecasts for calendar years (January-December) while others follow the financial year (April-March). All the above mentioned agencies have projected a growth rate of 8.5% for India during the current financial year.

"IMF follows the calendar year format to make numbers comparable as most countries of the world report growth data on the basis of calendar years. For those countries who follow the fiscal year format, we also release separate country-specific data. At present, our projection for India for the current financial year is 8.8%," Felman informed. He also said that the current financial year projection might also be revised.

IMF in a research paper recently said that in the medium term India would grow at 8% as against the Planning Commission's expectation of 9% during the 11th five-year Plan (2007-12).