PTI reported that International Monetary Fund has lowered India's growth forecast by 0.7% to 6.1% for 2012, the steepest cut for any nation, in view of deteriorating global economic situation.

The IMF, in its update of the World Economic Outlook, has also cut India's growth projection for 2013 by a similar margin to 6.5%.

It said while updating its April Economic Outlook “In the past three months, the global recovery, which was not strong to start with, has shown signs of further weakness.”

The IMF has reduced the global growth forecast for 2012 to 3.5% from 3.6%. For 2013, the growth forecast has been lowered to 3.9%, from 4.1%, indicating that there are harder times ahead for economies.

It said “Downside risks to this weaker global outlook continue to loom large. The most immediate risk is 'still that delayed or insufficient policy action will further escalate the euro area crisis.”

As far as the emerging and developing economies are concerned, the growth projection for 2012 has been estimated at 5.6%, 0.1% below the earlier forecast made three months ago.

IMF said “Growth momentum has also slowed in various emerging market economies, notably Brazil, China, and India. This partly reflects a weaker external environment, but domestic demand has also decelerated sharply in response to capacity constraints and policy tightening over the past year.”

Source - PTI

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