The International Monetary Fund raised the projection for India's economic growth rate by 1.3% points to 7.7% for 2010. The international body is bullish about India and says in its new economic outlook that country's economic expansion will be at 7.8% in 2011, up 0.5% projected in the previous outlook.

IMF expects a strong domestic recovery in India and projected growth rate of Indian economy for the calendar year is much higher than 5.6% in 2009.

The Indian economy has shown strong growth backed by a government stimulus. The growth rate of the economy was higher than expected at 7.9% in the third quarter of 2009 from 6.1% in the preceding quarter and 5.8% in previous three months.

Analysts say that the 7.7% growth rate is similar to the pace of growth the economy has already shown and is achievable. Projection from India pegs the economic growth at 7.75% for this fiscal year.

Jorg Decresson, an IMF economist said, "We have seen a very strong rebound for India. In the third quarter, the growth is already accelerated and we expect that to be maintained."

The report estimates China's growth rate will be 10% this year and nearly as fast in 2011 and that the country along with India, Brazil and Indonesia are experiencing rising domestic demand which makes it easier for them to start withdrawing the stimulus.

For the United States, the IMF report estimates the growth at 2.7% this year and then fall back to 2.4% growth next year as the government plans to withdraw stimulus.

In Europe, Germany is expected to grow 1.5% in 2010 and 1.9% in 2011 while Britain is expected to expand 1.3% this year and 2.7% in 2011, and Japan may grow 1.7% in 2010 and 2.2% in 2011.

The IMF also raised the projection for the World economy by 0.80 percentage points to 3.9% in 2010. The World economy had contracted in the year 2009 by 0.8%. It also warns that the coming times will be more difficult than before the financial crisis.

Regarding the industrialized countries, the report said that the inflation in such economies will rise from near zero levels in 2009 to 1.25%% in 2010 due to the rising energy prices.

The growth rate for countries classified as "advanced countries" is expected at 2.1% this year and 2.4% in 2011. Inflation in the developing and emerging economies will be near 6.25% in 2010.