The International Monetary Fund (IMF) on Friday pegged the growth rate for India at 9 per cent for FY 2007 and 8.4 per cent for FY 2008 and acknowledged that the robust growth rate of the Indian economy was a significant contributor to the global economy.

“The global economy continues to expand at a brisk pace, led by emerging markets,” the IMF said in its July update of its ‘World Economic Outlook.’

The IMF projects the global growth rate at 5.2 per cent in 2007, with the same level of growth being maintained in the subsequent year. The global economy moved up from 4.9 per cent in 2005 to 5.5 per cent in 2006.In tune with global economic outlook, the United States economy is expected to slow down to 2 per cent in 2007 and 2.8 per cent in 2008. The US economy registered a growth rate of 3.2 per cent in 2005 and moved up 0.1 percentage point in 2006. “The risk of an oil price spike remains a concern,” the update said.

It said with sustained strong growth, supply constraints were tightening and inflation risks have edged up since the April 2007 WEO outlook, increasing the likelihood that Central banks will tighten monetary policy further.
The IMF’s ‘Financial Market Update’ stated that financial market risks have also increased as credit quality has deteriorated in some sectors, and market volatility has heightened.