INDIA'S ECONOMY GROWS 7.9%, SLOWEST PACE SINCE 2004
Cherian Thomas
Bloomberg, August 29, 2008
(Bloomberg) -- India's economy grew at the slowest pace since 2004 last quarter as the fastest inflation in a decade and increased borrowing costs damped consumer spending. Asia's third-largest economy expanded 7.9 percent in the three months to June 30 from a year earlier, following an 8.8 percent gain in the previous quarter, the Central Statistical Organisation said in a statement in New Delhi today. Analysts expected gross domestic product to increase 8 percent. Inflation has almost tripled this year to 12.4 percent amid higher fuel and food prices, forcing the central bank to raise interest rates three times since June. While growth is almost double the average pace since India's independence in 1947, it is slowing along with the other so-called BRIC economies of Russia, Brazil and China.
"We don't expect India's slowdown to be too dramatic,'' said Philip Wyatt, a senior economist at UBS AG in Hong Kong. "There will be a gradual slowdown in GDP growth throughout this year - the industrial side of GDP is already slowing.''
India's benchmark Sensitive index, which has declined by a third this year, rose 3.4 percent to 14522.82 at noon on the Bombay Stock Exchange, while the yield on the key 10-year bond fell 11 basis points to 8.66 percent. The rupee was little changed at 43.755 against the U.S. dollar.
China, Russia
Finance Minister Palaniappan Chidambaram said today that growth for the year to March 31 will be close to 8 percent. India risks being overtaken by Russia as the world's fastest expanding major economy after China this year. Russia's economy may grow 7.1 percent in 2008, surpassing India's 7 percent expansion this year, according to World Bank estimates.
The World Bank expects the U.S. economy to expand 1.1 percent this year, half of 2007's pace. The U.S. economy grew at a faster-than-expected 3.3 percent annual rate in the second quarter, helped by a surge in exports that will probably wane as Europe and Japan head toward recessions. India's expansion slowed in the second quarter as construction growth weakened to 11.4 percent from 12.6 percent in the previous three months and manufacturing gained 5.6 percent compared with 5.8 percent in the first quarter, today's report said.
Cherian Thomas
Bloomberg, August 29, 2008
(Bloomberg) -- India's economy grew at the slowest pace since 2004 last quarter as the fastest inflation in a decade and increased borrowing costs damped consumer spending. Asia's third-largest economy expanded 7.9 percent in the three months to June 30 from a year earlier, following an 8.8 percent gain in the previous quarter, the Central Statistical Organisation said in a statement in New Delhi today. Analysts expected gross domestic product to increase 8 percent. Inflation has almost tripled this year to 12.4 percent amid higher fuel and food prices, forcing the central bank to raise interest rates three times since June. While growth is almost double the average pace since India's independence in 1947, it is slowing along with the other so-called BRIC economies of Russia, Brazil and China.
"We don't expect India's slowdown to be too dramatic,'' said Philip Wyatt, a senior economist at UBS AG in Hong Kong. "There will be a gradual slowdown in GDP growth throughout this year - the industrial side of GDP is already slowing.''
India's benchmark Sensitive index, which has declined by a third this year, rose 3.4 percent to 14522.82 at noon on the Bombay Stock Exchange, while the yield on the key 10-year bond fell 11 basis points to 8.66 percent. The rupee was little changed at 43.755 against the U.S. dollar.
China, Russia
Finance Minister Palaniappan Chidambaram said today that growth for the year to March 31 will be close to 8 percent. India risks being overtaken by Russia as the world's fastest expanding major economy after China this year. Russia's economy may grow 7.1 percent in 2008, surpassing India's 7 percent expansion this year, according to World Bank estimates.
The World Bank expects the U.S. economy to expand 1.1 percent this year, half of 2007's pace. The U.S. economy grew at a faster-than-expected 3.3 percent annual rate in the second quarter, helped by a surge in exports that will probably wane as Europe and Japan head toward recessions. India's expansion slowed in the second quarter as construction growth weakened to 11.4 percent from 12.6 percent in the previous three months and manufacturing gained 5.6 percent compared with 5.8 percent in the first quarter, today's report said.
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