Washington, July 18:

The International Monetary Fund (IMF) has lowered India’s growth forecast from 9.3 per cent in 2007 to eight per cent in 2008-09 as it predicted the world economy now ‘in a tough spot’ would grow by 4.1 per cent this year.

The global economy has weathered the impact of the credit crunch better than first feared, the IMF said today as it issued a downbeat forecast for the second half of 2008, amid concerns about inflation, particularly in emerging markets.

“The global economy is in a tough spot, caught between sharply slowing demand in advanced economies and rising inflation everywhere in and developing economies,” IMF’s World Economic Outlook (WEO) said.

The IMF expects global growth to slow significantly in the second half of the year, before recovering gradually in 2009. Updated forecasts in WEO also raise inflation projections.