India's Economy Slows Pace of Growth (to 5.8%)

India's economic expansion slowed in the most recent quarter but the new government and invigorated capital markets prompted some economists to suggest that the country has weathered the worst of the global downturn.

In the quarter ended March 31, India's gross domestic product grew 5.8%, compared with 8.6% for the year-ago period. The data come on the heels of increased government spending and a robust performance in several sectors, offsetting a decline in manufacturing.

Friday's figures indicate the Indian economy has better withstood the global downturn than most of its neighbors, which are mired in recession or forecasting scant growth for the year.

In a news conference, Commerce and Industry Minister Anand Sharma said the government would be "very happy" with GDP growth between 6% and 7% in the year ending March 31, 2010, and added, "hopefully we will be able to take it again towards 7%."

"Our emphasis will be to ensure that the Indian economy returns to the high trajectory of growth," Mr. Sharma said, pointing out that all countries were hit by the economic downturn, but India less so.

The Indian government upgraded its growth number for the fourth quarter of 2008 to 5.8%, from a provisional 5.3%. Indian growth for the year ended March 31 slowed to 6.7% from 9% the previous year, missing a government forecast for a 7.1% expansion.

India is "just on the cusp of a new economic cycle taking shape," said Rajeev Malik, a Singapore-based economist at Macquarie Group.

India's GDP data fuels hopes of recovery

http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article6387726.ece

New figures on the Indian economy, showing 5.8% growth, and latest results from Tata Motors have beaten forecasts

Rhys Blakely

Upbeat data from India today kindled hopes that Asia’s third-largest economy has emerged from the global sub-prime storm and is heading for a rapid recovery.

Tata Motors, the Mumbai-based owner of Jaguar and Land Rover, unveiled a smaller than expected 51 per cent fall in full-year profits, benefiting from a pick-up in sales of trucks in its home market in its final quarter and falling raw material costs.

Official figures for the Indian economy also beat forecasts, suggesting that domestic demand has weathered the credit crunch better than analysts had expected.

The economy grew by 5.8 per cent in the final three months of the fiscal year, as heavy government spending offset a continuing slump in manufacturing. The reading was far better than the 5 per cent expected by economists.

Rajeev Malik, an economist with Macquarie, said: “I think the GDP upgrade cycle has just started. We are past the eye of the storm.”

Equities benefitted from the GDP numbers, with India’s benchmark Sensex index gaining 2.3 per cent to close at a near nine-month high.

In April, the index gained more than 17 per cent to register its best monthly performance in 10 years amid strong buying by foreign investors. It gained another 17 per cent in a single session on May 18 after the ruling government coalition emerged as strong winners from India's general election, averting fears of a hung parliament.

The buoyant mood on the bourses will provide ammunition to those analysts who stuck to their guns as Mumbai’s stock markets plummeted last year, to insist that India and other large emerging economies had “decoupled” from the West.

Excerpt. Read more at Business.TimesOnline.co.uk

“I think it's an incredible growth rate.
Of course, India is coming from a much lower economic position and is growing in part because it's adopting technology already firmly embedded in Western economies.

IMO India's growth indicates that the world-wide recession is ending and, if the U.S. doesn't start improving shortly, we have only the Obama administration to blame.”

India does not have the “unproductive” Burden we carry or are cursed with, Second we Produce nothing here where India is smart enough to protect its industries that employ people.. There is nothing in the US to power any recovery except maybe the paper industry that supplies the fed with stock for currency.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.