Terming the Indian growth pattern as impressive, the International Monetary Fund has said that it does not foresee the economy overheating as long as the current monetary policy is in place.

"(India's) growth has been impressive--9.7 per cent in 2006, 8.9 per cent in 2007 and we are viewing at 8.4 per cent in 2008. That is really an impressive growth pattern," IMF Managing Director Rodrigo de Rato said in Washington ahead of the annual meetings of the International Monetary Fund and the World Bank.

On the chances of the Indian economy 'overheating', de Rato said, "We don't see that if the monetary policy continues to behave as it is behaving right now and independence is strengthened in monetary policy."

"With inflation coming up a bit in 2007, we think the monetary responses by the (Reserve) Bank of India [Get Quote] have been appropriate. The credibility of the monetary policy in India has become better and stronger and the steps of the liberalisation of the financial markets of India are probably the steps in the right direction," the top IMF official said.

The priorities for India down the road should be keeping up with the drive towards further liberalisation like bridging major gaps in infrastructure, addressing the labour shortages in the skilled sector and opening up to foreign investment, he said.

De Rato noted that there has been flexible movement of Indian currency which is good for the country, adding that the confidence of investors in India is increasing. "It will be a good example for other countries in the region to see that flexible exchange rates could be very useful in managing a booming economy as is the case of India. There has certainly been an important step up of capital inflows which show that the confidence of investors in India is increasing," the IMF official said.

He stressed on the need to introduce the Indian labour force into the global market, step up educational reforms and address the very strong shortages of skilled labour.

"We also see the need to keep increasing the openness of the Indian economy to foreign competition and to foreign investment in the interests of the Indian society," de Rato maintained.