The International Moneytary Fund has revised its growth forecast for India in FY '10, raising it to 9.7 percent from the July figure of 9.5 pc.

The Washington based lender said that India's growth-surge is based on local consumer demand. “Low reliance on exports, accommodative policies, and strong capital inflows have supported domestic activity and growth,” the IMF said in the report titled ‘World Economic Outlook 2010’.

“The rapid pace of domestic activity, evidenced by rapidly rising inflation, led the central bank to increase the repo policy rate," the report held, “Robust corporate profits and favourable external financing will encourage investment.”

Last month, Manila-based Asian Development Bank (ADB) predicted a 8.5 pc growth for India, upraded from April’s 8.2 percent.

Earlier this month, Goldman Sachs Group Inc increased India’s economic growth forecast to 8.5% from 8.2% for the financial year ending March 31.
The RBI projection for India’s growth in 2010 is however conservative – 8.5 percent - same as PM’s economic advisory council's prediction. However, the council projected India’s growth at 9 percent in 2011.

But the IMF has lowered India’s growth next year. “It is projected to grow at 8.4 percent in 2011,” the outlook said. 

China is set to maintain its double-digit growth this year at 10.5 pc while it may sink to 9.6 pc in 2011, according to the IMF report.

"The global trade is forecast to expand by 4.8 percent in 2010 and 4.2 percent in 2011, with a temporarily slowdown during the second half of 2010 and the first half of 2011,” it said.