The International Monetary Fund (IMF) today revised again downwards the country's growth outlook for this fiscal to around 8% in line with its overall global economic outlook clouded by rising commodity prices led by oil and high inflation.

"As new downside risks have emerged across the globe, and particularly in Asia Pacific economies with many of them overheating, we revise downwards our growth for the region and also for India, where we see the growth momentum decelerating this fiscal to around 8%," International Monetary Fund(IMF) director, Asia Pacific department,Anoop Singh said here.

Earlier, the multilateral agency's projection for the country was 8.2% for 2011 calendar which was first projected at 8.4%.

Singh was talking to the media after presenting its latest report on the Regional Economic Outlook for Asia and Pacific: Managing the Next Phase of Growth, to the Reserve Bank officials here.

"In 2011, the pace and composition of growth will continue to show notable differences across Asia. China and India are expected to lead the rest of the region with China growing by 9.5% and India by around 8%,"Singh said.

Earlier, ADB had also pegged down India's growth to 8.2% for this fiscal,from its earlier estimate of 8.7%, on high oil prices.

In the annual monetary policy announced on May 3, Reserve Bank had pegged down growth to around 8% and adopted a hawkish policy stance, while the Budget pegged growth at 9% over even more.

Last Friday, Chief Economic Adviser Kaushik Basu had indicated that the government would revise downward the growth forecast for the year. In FY11, the economy is believed to have grown by 8.6%.

"All over the world there has been revision of growth prospects. So we might go in for a revision. Obviously, it is not going to be upwards," Basu had said in the Capital.

Meanwhile, the IMF report said that for the whole of Asia it expects growth to remain robust at a more sustainable pace of nearly 7% for both this year as well as the next.

Underlining the need for controlling inflation, and the rising pressures of overheating in many Asian economies, the report says, "but Asia's rapid growth has been accompanied by the emergence of overheating pressures, in both goods and asset prices, as output gaps have generally closed."

Noting that headline inflation, which was rising since last October, has now spilled over into core inflation, raising inflation expectation in many countries, including India.

On the newly emerged risks to growth, the report says the prospects for sustained global growth have strengthened in recent quarters, but fiscal and financial vulnerabilities continue to cloud the outlook for advance economies on the one handand new downside risks have emerged for the emerging markets--the Japanese disaster and rising energy and food prices which could affect Asia's growth and inflation outlook.

"The terrible losses suffered from the earthquake and tsunami in Japan followed by a prolonged disruption of industrial production, could affect other economies in Asia and elsewhere which are linked to Japan through supply chain," says the report.

"Renewed spikes in energy and food prices could affect Asia's growth and inflation outlook. India, among other countries, are particularly vulnerable to food and energy price disruptions because of their relatively higher shares in the expenditure basket.

"Were the recent declines to be reversed, higher energy prices could hurt Asia if it resulted in a global slowdown while higher global commodity prices could further strain inflationary pressures. We expect inflation in many Asian economies to peak in mid-2011 before decelerating in 2012, but risks are titled to the upside," the report notes.

To a question on whether India will be able to achieve its ambitious fiscal deficit target in the wake of most likely deceleration in growth, the IMF director Anoop Singh said, "the government is very much resolved on doing so. After all we are only in the beginning of the year."

The Budget 2012 has pegged the fiscal deficit at 4.6% of GDP or Rs4.13 lakh crore, while the same is believed to have closed at 5.1% in FY11 on the back of the spectrum haul and reduced public spending by the Centre.

The government collected Rs1.08 lakh crore from 3G and broadband wireless access spectrum auctions last fiscal which helped it reduce the fiscal deficit from 5.5% estimated earlier to 5.1%.

Following the global economic crisis and the resultant stimulus measures, the fiscal deficit had ballooned to 6.3% of the GDP in FY10.In the medium term fiscal policy, the budget pegs the rolling target of fiscal deficit at 4.1% for FY13, and 3.5% for FY14.

Lauding the hawkish monetary policy stance taken by RBI last week, Singh said, "we strongly welcome the steps that RBI has taken and remain confident with its stated policy stance to maintain an interest rate environment that moderates inflation and anchors inflationary expectations."

DNA