Praising India for its macroeconomic policy and structural reforms, International Monetary Fund, on Monday, said the country will grow at more than 8 per cent (this year), which was “wonderful” considering there was forecast of a global growth slowdown.

“India’s economic growth is due to good policy of the government and Reserve Bank of India. Country is benefiting from sound macroeconomic policy and structural reforms of last 5-10 years,” IMF Managing Director Dominique Strauss-Kahn said delivering a lecture at the RBI here.

Global crisis

Mr Kahn said effects of global financial crisis were serious and IMF has reduced the forecast for global growth to 4.1 per cent from 4.9 pe cent.

He, however, said that emerging market economies like India and China cannot remain immune from global crisis, which has complex linkages.

“Decoupling is a misleading idea...the linkages between developed and emerging market economies are now much more complex than before,” he said. Earlier, advanced and emerging countries only had trade links, but today they have financial links. As financial markets face turmoil, it will reduce domestic demand in advanced economies and create more spillovers into emerging markets.

“There are large capital flows because of wide interest rate differential which pose policy challenges in managing liquidity,” Mr Kahn said, adding that there were signs of emerging markets being affected by financial turmoil.

He pointed out emerging economies like India should use the opportunity to review if some part or some instrument is not as transparent as it should have been. He also said there should be convergence in tools of the regulators to attain the common goal of stable global conditions. “There should be multilateral discussions and dialogues between the players,” he said, adding that IMF could be a platform being a multilateral agency.