The International Monetary Fund (IMF) says India will remain relatively insulated from the global economic slowdown which could worsen on account of the September 11 terrorist attacks.

Pointing out that Indias economy was relatively closed in nature, the IMF in its global economy report observed that Indias economy would continue to grow, though at a lower pace, mainly because of the the countrys highly cost competitive information technology sector.

According to the IMF, Indias economy was growing at 5.7 per cent during 2001-2002 while inflation was growing at 5.5 per cent. The slowdown in the Indian economy as compared to the past will be on account of the earthquake, drought, high energy prices and the waning of fiscal stimulus initiatives taken in the late 1990s.

The IMF said it was critical for India to undertake initiatives like proposed fiscal responsibility legislation and implementing structural reforms.

The IMF said India has seen its poverty rate drop dramatically in the past 30 years-from 55 per cent of the population in 1974 to 26 per cent in 2000.