By– Correspondent | Date– May 10, 2011 | Place– Mumbai
The International Monetary Fund has revised the growth projection of Asian countries. It has projected a downward trend of Indian’s growth for 2011 to around 8% owing to high inflation and overall global economic turmoil created due to rising prices of commodity goods and oil. Anoop Singh, the director of Asia Pacific department of International Monetary Fund stated on May 9th that as new downside risks have emerged across the globe and particularly in Asia Pacific economies IMF have revise downwards the growth for the region and also for India, where the growth momentum would be reducing to around 8%. On the other hand, China is expected to lead the rest of the region by growing at 9.5%.
This announcement was made while presenting the latest reports of IMF on the Regional Economic Outlook for Asia and Pacific -Managing the Next Phase of Growth to the officials of Reserve Bank of India. This news comes as another slap on the face of Reserve Bank of India, who has been annoyingly failing to control the growing Inflation in the country. There is no doubt that the lower growth projection of the country is due to RBI’s step of excessive increase in interest rates, that too repeatedly in the last fiscal.
For instance, the RBI has raised interest rates by 50 basis points recently, almost double of what the market was expecting. This was not only excessive but such continuous hike in interest rates by RBI is now proved to be uncalled for and it is evident that the government has failed to understand the root causes of inflation.
The RBI has evidently come up with the wrong tackling solutions for tackling inflation and the growth rate projected by IMF has now showed the dark side of RBI’s wrong decisions.