Reuters reported that the International Monetary Fund cut India’s growth forecast for 2012 sharply to 4.9% from 6.1% estimated in July and 6.8% in April, owing to continued investment slowdown and further deterioration in the global economy since the previous estimate.

It also issued the dire warning that unless European and US policymakers deal proactively with their daunting economic challenges, the outlook could worsen.

The fund said that India’s growth could rebound to 6% in 2013 on the back of recent reform measures coupled with improvement in the external conditions. Pertinently, in its July outlook, the fund had estimated India’s growth in 2013 higher at 6.6%.

In the World Economic Outlook report, the IMF cut its outlook for the world economy to 3.3% in 2012. Wondering whether emerging economies would maintain their strong expansion while shifting further to domestic sources of growth, it cut growth outlook for them too, to 5.3% from 5.6%.

Source - Reuters

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