WASHINGTON Finance Minister Pranab Mukherjee said on Tuesday he will not challenge the International Monetary Fund's prediction that India's economy will grow 8.8 percent this year, despite his ministry's own forecast of 8.5 percent growth.
Mukherjee, speaking to the U.S.-India CEO Forum here, said his view follows recent data showing that gross domestic product in the January-March quarter grew 8.6 percent -- the fastest rate in six months.
"This year, my ministry has predicted a growth rate of 8.5 percent. I notice that the IMF has challenged our prediction. For once, however, I am not going to contest the IMF assessment. The IMF believes that the Indian economy will grow at 8.8 percent."
Earlier this month, the finance ministry's chief economic adviser forecast India's growth in the quarter ended June 30 at 8.9 percent. In the fiscal year ended March 31, India's economy grew 7.4 percent.
Mukherjee attributed the strong performance of India's economy through the financial crisis in part to the country's "dynamic" corporate sector and to high levels of savings and investment.
He said India was saving and investing about 34 percent of GDP, compared with around 30 percent prior to 2003. "Data we have received for the last couple of months suggest that this is still rising," he added.
Mukherjee said these investment levels, along with more than $850 billion in needed infrastructure investment, gave him optimism that India can break into double-digit GDP growth in the next five years.
The Indian finance minister will meet with U.S. Treasury Secretary Timothy Geithner later on Tuesday.
(Reporting by David Lawder; Editing by Dan Grebler)
(For more news on Reuters India, click in.reuters.com)
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