The International Monetary Fund (IMF) on Monday again revised downwards the country's growth outlook for 2011 to around 8 per cent on the back of high inflation and overall global economic outlook, clouded by rising commodity prices led by oil.
"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 per cent," said IMF director, Asia Pacific department, Anoop Singh.
The multilateral agency had earlier also moderated the country growth projection to 8.2 per cent from the 8.4 per cent.
"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 per cent and India by around 8 per cent," Singh said.
He 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 in Mumbai.
Earlier, international financial lender ADB had also revised its growth projection for India to 8.2 per cent for this calender year from earlier estimate of 8.7 per cent, on account of high prices.
In the annual monetary policy announced on May 3, the Reserve Bank had said the country's economy would grow to around 8 per cent while the Budget pegged growth at 9 per cent over even more.
Chief Economic Adviser Kaushik Basu had on Friday indicated that the government would revise downward the growth forecast for the year. Last financial year, the economy is believed to have grown by 8.6 per cent.
"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 Delhi.
Meanwhile, the IMF report said for the whole of Asia, it expects growth to remain robust at a sustainable pace of nearly 7 per cent for this year as well as the next.
Underlining the need for controlling inflation and rising pressures of overheating of many Asian economies, the report says, "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."
It notes that headline inflation 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, fiscal and financial vulnerabilities continue to cloud the outlook for advance economies and new downside risks in emerging markets wherein the Japanese disaster, rising oil and food prices 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.