Washington, March 17 (IANS) In an upbeat assessment of India's growth outlook, the International Monetary Fund (IMF) forecast India's economic growth to accelerate to 8 percent in 2010-11 from 6.75 percent in 2009-10.

However, IMF in its latest Article IV consultation paper issued Wednesday also cautioned India on the need to rein in high inflation and rising fiscal deficit.

'With India's long-term prospects remaining strong and private sector balance sheets sound, we expect growth to be back at potential in 2010-11 even if advance economies grow below trend,' it said.

India's economy is recovering well, with conditions now in place for a gradual tightening of monetary policy, the IMF said while indicating there is room for the rupee to rise without compromising a recovery.

'India's economy is rebounding strongly ahead of most countries in the world, bringing policy trade-offs to a head earlier than in other countries,' the IMF said.