Washington: The International Monetary Fund (IMF) has fairly brought down its projection for Indian economic growth to 8.9 percent in the existing year (2007) from its previous estimation of 9 percent, but said the development could be higher than its estimate if business profits cause still higher investing.

In its World Economic Outlook Report, released previous to Fund-Bank conference from October 20, IMF also anticipated that Indian financial system would develop at 8.4 per cent in the coming year (2008).

The Fund said that the feebler US prospect would beat Asian economic systems, mainly the newly industrialised one.

The Fund said, “Against this background, growth projections have been revised downward modestly since the July World Economic Outlook Update. The regional economy is now expected to expand by 9.2 per cent this year and 8.3 per cent in 2008... The Indian economy is expected to expand by 8.9 percent this year and 8.4 per cent in 2008.”

According to the viewpoint, Chinese financial system would develop at 11.5 per cent in the recent year (2007) before loosening up to 10 per cent in 2008.

“Growth in India could also be stronger than projected, particularly if robust corporate profits further boost investment spending,” the report added.

The fund also said that the inflation has allayed in recent months, in India, but upper side threats linger as core inflation is still elevated, credit development remains rapid, and equity costs have climbed harshly over the last 12 months.

Finance Minister, P Chidambaram left for Washington to be present at the Fund-Bank conference.