The RBI has already hiked interest rates 12 times since March, 2010, to control inflation, which is currently hovering near the double-digit mark.
As the world climbs out of the deepest recession in recent history, Asia is leading the global recovery.
Asian economies have been very strong in their stimulus from both monetary and fiscal sources.
India's economic growth is likely to shrink by 1.25 per cent to 7.9 per cent this fiscal, mainly on account of tight monetary conditions and continued pressure on inflation, the International Monetary Fund said on Friday. The IMF report also warned that investment would be more affected than consumption on account of the tight monetary conditions and fall in global economy following US sub-prime crisis. Compared to China, India has little fiscal space to keep up the growth.
The International Monetary Fund (IMF) has lowered its real export growth forecast for India for 2008 to 13.2 per cent from its April forecast of 16.3 per cent.
"We see the Indian economy rebounding from our projected 6.1 per cent growth this fiscal year to something like 7 per cent in the next fiscal year (2020). We see the factors that will support growth, including monetary policy stimulus, working their way through the pipeline," Jonathan Ostry, Deputy Director, Asia Pacific Department at the IMF, told reporters.
China, it said, is projected to grow at 6.6 per cent in the current year which will moderate to 6.4 per cent next year.
The GST will subsume excise, service tax, value added tax, octroi etc.
'India has benefited from lower oil prices and remains the fastest-growing large economy in the world.'
Companies shipping to Europe to see rupee revenues coming under pressure.
The temporary disruptions (primarily to private consumption) caused by cash shortages accompanying the currency exchange initiative are expected to gradually dissipate in 2017 as cash shortages ease, the International Monetary Fund said in its regional economic outlook.
Most forecasts do not have a track record of transparency and accuracy
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