INDIAN ECONOMY TO DECELERATE, BUT NO NEED TO PRESS PANIC BUTTON
The Economic Times, January 26, 2009
China has just declared the GDP estimates for the fourth quarter and the outcome was not very encouraging. The Chinese economy, which is now world’s third-largest, (in nominal terms) grew by just 6.8% during the December ’08 quarter. This is a sharp deceleration from 9% growth in the previous three months and 13% expansion in whole of 2007.
The Economic Times, January 26, 2009
China has just declared the GDP estimates for the fourth quarter and the outcome was not very encouraging. The Chinese economy, which is now world’s third-largest, (in nominal terms) grew by just 6.8% during the December ’08 quarter. This is a sharp deceleration from 9% growth in the previous three months and 13% expansion in whole of 2007.
The news would come as a rude shock to many economic observers and investors. China’s economy was supposed to experience only a mild slowdown and thus cushion the global impact of a recession in North America, Euro zone and Japan. The latest estimates from Chinese statistics bureau have now put cold water on this hope. Simultaneously, it has highlighted the head winds being faced by the emerging economies. The world’s attention will now be focussed on India, the developing world’s second-biggest economy.
The question every one will be asking is how vulnerable is the Indian economy? Certain leading indicators such as exports and manufacturing output is clearly showing that Indian economy slowing down. But how severe can it get?
To get an answer to that we have to look at the expenditure side of the India’s economy. In an economy gross domestic product (GDP) is nothing but the sum total of good and services produced in that economy in a given year.
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