Indian Economy 2009

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

  1. Getting inflation under control
  2. Spreading the benefits of growth more equitably.
  3. Completing investment projects which are essential for long term development of economy.
  4. 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

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63 thoughts on “Indian Economy 2009”

  1. It appears that indian economy can sustain this recession and will emerge as a good marker among all big nation like US /Europe

  2. India need to look forward.Its present economic condition is sinking rapidly.The leaders of our country really need to pay more attention in improving our nation,so that no one dares to call us a third world nation than filling their own pockets.

  3. I Still think India has a strong economy. But, they should learn how to use it as something earned instead of as something that they just get for free.
    Bella

  4. hi,…sustainable growth with renewable energy sources…. to meet future needs and demands organically… by environment friendly ways…better and improved infrastructure with INNOVATION …better life and health for all – clean and green environment – for us and for future generations..reaching to grassroots with value added services…and to be on track of overall growth !

    Strength and Happiness !

    regards,
    sachin bhadke

  5. the present trend is in a worst case but it will recover with that of other nations invest in this session and wait for long term like 5-6 years then youn will eat the hot cakes

  6. as we known our economy has gone unexpected recession zone .my think is that, is there any relation between psychological factors and our economy?

  7. I THINK INDIAN ECONOMY IS THE BEST TO OTHER, FIRST WE HAVE WORK HARD WAHT EVER WE HAVING.DON’T BORROW THE OTHERS.

  8. in future indian economy is our hands that means is in students hands so we all are work hard to improve our indian society

  9. Indian economy was not much effected with global recession ,we have to make such arrangements to have least impact of global economic fluctuations ,for which the govt shoud decide the degree of dependency in a crestal clear way.

  10. Indian economy is experiencing a downturn in recent times but this is mainly due to the economic depression . In fact , it is not affected as much as America and Europe . As the fourth biggest economy in the world , it is likely to be one of the most fast growing in the world . According to a survey , it is likely to overtake China till 2025 in this respect . The need of the hour is to become financially strong in the International Market . The political system has to be strengthened . More attention has to be given to the upliftment of weaker sections of society . Weaker sections does not mean any particular caste but it refers to the poorer people of society belonging to any caste group . Full economic development can only be achieved by the development of all sections of society . WE have to progress by joining hands to hands AND not by cutting them

  11. Inflation is the big thing for me in India. That would put me off investing there.

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