India to grow by 6.7% -- IMF

India to grow by 6.7% -- IMF
ASSOCIATED FRANCE PRESSE

SEPTEMBER 19: IMF today lauded India's economic performance in recent years forecasting expansion of annual growth at 6.7 per cent for 2000 but said significant policy changes needed to be put in place to sustain high growth to reduce poverty in medium-term.

"India's economic performance has been remarkable in recent years, despite the adverse effects of the regional crisis on exports and the more recent hike in world oil prices," the IMF said in its latest World Economic Outlook.

In India, where growth was 6.4 per cent this year, the pace of GDP expansion will remain steady: 6.7 per cent in 2000 and 6.5 per cent in 2001, said the IMF.

"Nonetheless, significant policy challenges need to be addressed in order to sustain high growth and facilitate poverty reduction over the medium-term," it said.

The economic recovery is accelerating in Asia, which will see average growth above six per cent for 2000 and 2001, it said. The region, hit hard by recessions in 1998, came back to post average growth of 5.9 per cent in 1999. And the economies of Asia excluding Japan will grow collectively at a rate of 6.7 per cent in 2000 and 6.6 per cent in 2001, the IMF said.

"The rebound from the crisis of 1997-98 is continuing in Asia," the IMF said in its semi-annual World Economic Outlook, released here ahead of meetings of IMF and World Bank policymakers.

It said growth has been helped by exports, especially of electronics products, for which Asia is now the world's leading supplier. But it added that domestic demand is becoming a more important factor in expansion in Asia.

South Korea, the fastest-growing Asian nation with 10.7 per cent growth in 1999, will see that rate moderate to 8.8 per cent this year and 6.5 per cent in 2001, the IMF said.

In China, which grew at a 7.1 per cent pace last year, strong growth will continue, according to the IMF, which predicts 7.5 per cent GDP growth in 2000 and 7.3 per cent growth in 2001.

The IMF said China's expected admission to the World Trade Organization "underscores the need to accelerate reforms of state-owned enterprises and the banking system, whose financial systems remain difficult."

Hong Kong, whose statistics remain separate from those of China, is expected to see growth of eight per cent this year and 4.8 per cent in 2001, the IMF said.