IMF Lowers India Growth Story To 7.8%

With the world economy predicted to slow down this year, the International Monetary Fund (IMF) has forecast that Indian economy will grow at 7.8 per cent in 2008. Emerging markets and developing countries are expected to continue to grow strongly, albeit at a somewhat slower pace than in 2006, IMF said in its World Economic Outlook (WEO) report.In India, rising revenues are expected to lead to a more than one per cent of GDP decline in the deficit (to 6.3 per cent of GDP) in FY07, but with a public debt ratio of 80 per cent of GDP, further consolidation remains a priority.Inflationary pressures across the region remain generally well contained, although rapid credit growth poses a challenge in a number of countries.The Economic Outlook points to a global economy that expanded vigorously in 2006, growing by 5.4 per cent while the economy of the United States slowed in the face of headwinds from a sharp downturn in the housing market.