After several years of rapid growth, 2009, will prove a testing year for India.
Inflation Inflation continues to pose a threat. Inflation peaked at 12% in early August ’08. Inflation, is being caused by rapid growth (demand pull factors) but, also the cost push inflation factors (rising oil prices). Hopefully, the fall in oil prices and higher interest rates will reduce inflation without causing too much of a slowdown.
Economic Growth. After reaching growth of 9.8% in 2007/08, growth is expected to slow down to 7%. This might not be a bad thing as it will avoid inflationary pressures building further. However, some worry the global credit crunch could reduce growth much more.
Global Recession and Indian Economy. It appears that Europe, Japan and the US are entering into recession. Falling house prices, crisis in the financial system, and lower confidence could lead to a sharp downturn, with the worst still to come.
Many argue, that India’s growth is not so dependent on growth in the West. However, the Indian stockmarkets have been hit by the global crisis. India’s growing service sector and manufacturing sector would be adversely impacted by a global downturn. However, I still feel that India’s economic success is not dependent on growth in the West, and at worst India’s growth rate will be less than hoped for.
The Indian government still have a target of 10% growth for 2010/11, but, I think this could prove unrealistic.
Challenges for Indian Economy in 2009
- Getting inflation under control
- Spreading the benefits of growth more equitably.
- Completing investment projects which are essential for long term development of economy.
- Dealing with global financial uncertainty, which will make capital flows and exports more difficult.
Sensex in 2009
After falling in 2008, the Sensex could offer one of the best returns for global stockmarkets. India’s strong economic growth will buck the global trend for lower growth.
Indian Rupee 2009
The Indian Rupee has had a surprisingly weak year. The Rupee has fallen from 39 Rupee to 1$ in January 2008, to 44 Rupee in September. Real interest rates in India are still negative, but, if the Indian inflation rate is reduced, and the government resist the temptation to go all out for growth, the Rupee may rebound, at least against the dollar, which will face more difficulties in 2009
Indian Economy 2010
More on Indian Economy
- Indian economy set to grow despite downturn – Indian Reuters
- Indian economy – wikipedia
- Problems facing Indian economy
About The Author
indian economy is very good economy ,it is very useful for all peoples.
indian economy is in avery critical position.though measures are being taken by RBI nothing is going well for the country.india can only bounce back when the money flow is maintained well but this is not happening.globalisation, liberalisation are doing a very little with the undeveloped countries.
Indian economy is doing good. Its the time of affordability.
Prices have become cheap, new opportunities growing. Yes there are some financial factors to be considered but as a whole – we are much better. Green shot effect is already felt in the west, its a matter of time. More concerned about the banking system. How long will it take to align their business model re-structuring – will be matter of few years or generations to come!!!!!!!
Indian Economic service sector & manufacturing sector has gone fully down this year. 2009 is very bad to all the sector which not pickup the economic growth.
Share market are gone down, Mumbai attack, IPL canceld, election appears etc.
No word to say this year all are in trouble.
God pls save us
well thinking about 9%-8% growth is like day dreaming,
when we face grave situtation like deflation(where the real products which we cosume is expensive,this is not
deflation to any amm adami)
we have elections comming,where no party is capable of forming a government on its own.
the prime minester is simply not able take his decisions,
this will defenitly effect the growth prospects of our country.
what government has shown in the recent five years was immense fluctuations in the capital and product and service market. each and every sectors of economy was hit hard. my question to the current government is what are the measures they have taken to avoid such fluctuations?