INDIA’S ECONOMY GROWS SLOWEST SINCE 2009 AS FASTEST BRIC INFLATION BITES
Bloomberg, November 30, 2011
India’s economy grew last quarter at the slowest pace in more than two years after the nation’s central bank raised interest rates by a record to tame the fastest inflation among so-called BRIC nations.
Gross domestic product rose 6.9 percent in the three months through September, the Central Statistical Office said in a statement in New Delhi today. That’s the weakest expansion since the second quarter of 2009, and matches the median of 6.9 percent in a Bloomberg News survey of 24 economists.
Prime Minister Manmohan Singh’s efforts to stimulate growth are being hamstrung by corruption scandals that have stalled legislation for a year, and political outcry against foreign investment in retail. The Reserve Bank of India has also been constrained in supporting the economy as it struggles with inflation that’s almost twice the rate in China and higher than in Brazil and Russia.
“High interest rates, uncertainty about reforms, allegations of corruption and recessionary global conditions are casting a deep shadow over India’s growth story,” said Rohini Malkani, a Mumbai-based economist at Citigroup Inc. “What is worrying is that growth prospects do not seem sunny for the next year either.”
Citigroup this week cut its estimate for the Indian economy’s expansion to 7.1 percent for the year ending March 31 from 7.6 percent earlier.
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