India to grow 9.5% in 2010: IMF

The International Monetary Fund on Thursday raised India's growth forecast for 2010 to 9.5%, stating that favourable financing conditions and robust corporate profits will accelerate economic expansion. The multilateral lender hiked its growth projection from the earlier estimate of 8.8% it made in April. Recently, PM Manmohan Singh had said the country's economy is expected to grow by 8.5% for the financial year ending March 31, 2011. In the last fiscal, the economy expanded 7.4%.

According to IMF's World Economic Outlook (WEO), the global economy expanded at an annualised rate of over 5% during the first quarter of 2010, mostly due to robust growth in Asia. The global economy is recovering faster than expected but Europe's debt crisis might stall the rebound and governments need to shore up shaky public confidence, IMF said.

The agency raised its 2010 world growth forecast to 4.6% from 4.1% in April and boosted estimates for the US and China. But it warned that "risks have risen sharply" and Europe has to quickly resolve debt problems and restore confidence in its banks.

IMF said Asia's strong recovery from the global financial crisis continued in the first half of 2010, despite renewed tension in financial markets. "GDP growth forecast for Asia has been revised upward for 2010, from about 7% in the April WEO to about 7.5%," it added. The fund raised its 2010 forecast for China to 10.5% from 10% in April and for Japan to 2.4% from 1.9%. Its forecast for 2011 growth was unchanged at 4.3%, a decline from this year's rate. In a move that might fuel concern the recovery is fading, the fund lowered its 2011 growth forecast for China from 9.9% to 9.6%, for Japan from 2% to 1.8% and for Britain from 2.5% to 2.1%.