IMF ups India growth forecast to 7.2% for current fiscal

WASHINGTON: Terming Indian economy a "bright spot" on the global economic landscape, IMF today raised its growth forecast for the current fiscal to 7.2 per cent, even as it called for steps to revitalise the investment cycle and accelerate structural reforms in the country.

In its annual assessment report for the country, the International Monetary Fund (IMF) also said India has emerged as one of the fastest-growing big emerging market economies and the growth rate would further accelerate to 7.5 per cent in the next fiscal, 2015-16.

The new forecasts have taken into account a revised methodology adopted by India earlier this year for calculating the GDP figures, about which IMF said that the country has "improved the way it measures economic output".

The new methodology, however, has been termed as 'puzzling' initially by some including Chief Economic Advisor Arvind Subramanian and RBI Governor Raghuram Rajan. Incidentally, both Subramanian and Rajan have been with IMF in the past.

Last year, IMF had forecasted a growth rate of 5.6 per cent for the current fiscal, and 6.4 per cent for the next.

The Indian economy is reviving, helped by positive policy actions that have improved confidence and lower global oil prices, the IMF said, while anticipating stronger growth in the next fiscal on the back of stronger investment flows following improvements to the business climate.

To continue on this trend, India needs to revitalise the investment cycle and accelerate structural reforms, it said in its annual assessment report for the country.