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 GOING TO VERY GOOD POSITION. BUT, SOME OF THE FACTOR AFFECTING IN OUR NATIONAL IN ALL POINT OF VIEW.
if indian govt will introduce a petroleum cards system like a rahsan cards
There is need of some improvement in the process and techniques of economic growth to make a strong economy.
no doubt, its pain ful time for most of d emerging countris.as per d indian economy is concern…it has also effected wid d global downturn and sub prime crisis which was started since 2007…rupee has depreciated 28%against dollar,stock market has shrinked48%,according to9 forbes asia report net combined wroth of 40 indian businessman has declined $139bn dollar frm $369bn….it shows dat indian economy has very much effected….not only dis but hi economic growth has also very much effected…it is 6%in d first quarter declined frm 9%growth rate of last year….
hi people,u know who will be escape from this economic problem…………………….
ANSWER- WE ALL R INDIANS
Indian economy at persent is facing a negative growth obviously because of the rescesion. Its noticible that even the value of the Indian currency in international market has fallen sharply due to the same. Hence its clear that privet sectors are doing better and that more ane more compinies are becoming privet undertakings with the prime motive of earning profits!