India's economic growth to quicken in 2013: OECD

Discussion in 'Economy & Infrastructure' started by Yusuf, May 22, 2012.

  1. Yusuf

    Yusuf GUARDIAN Administrator

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    PARIS: India's economic growth is likely to rise to more than 7.5 percent in calendar year 2013 but continued government policy uncertainty could erode the country's longer-term growth prospects, the OECD said on Tuesday.

    A cyclical upturn in investment, stronger external demand and the effects of recent monetary easing will boost growth, the report said, although it warned that high inflation would dampen the investment climate.

    The prediction of higher growth in the Organisation for Economic Cooperation and Development's outlook report should cheer Prime Minister Manmohan Singh's government - which has faced an avalanche of criticism over how it has run Asia's third-largest economy and its scant progress making key reforms.

    The upbeat OECD forecast stood in stark contrast to the pessimistic view offered on Monday by Morgan Stanley, which cut its growth forecasts for India, citing a high budget deficit and slowing private investment. It said it now expected the economy to grow by 6.8 percent, instead of 7.5 percent, in 2013.

    Standard & Poor's rating agency cut its outlook for India's credit rating to negative from stable in April, reflecting worries about high deficits and political paralysis that has stalled progress on major economic reforms.

    India's economic growth slowed to 6.1 percent in the three months to December, the weakest annual pace in almost three years, while the rupee slumped to record lows against the dollar on Tuesday.

    "A moderate cyclical pick-up in investment is projected in the near term," the OECD said. "Later this year and into the next, growth is set to pick up to around trend rates, supported by the delayed effects of the recent monetary policy easing."

    "However, still high inflation will limit the room for significant further relaxation," it added.

    Policy uncertainty

    India has had rapid economic growth after opening up its economy in 1991. But investors fret that Singh's government is now squandering a chance to tap the country's potential.

    The current account deficit is the highest since 1980. Reforms such as opening India's supermarket sector to foreign chains like Wal-Mart stuttered as the government failed to convince powerful coalition allies. Inflation is the highest among the so-called BRICS group of major developing nations.

    Costly subsidies have pushed the fiscal deficit to 5.9 percent from a target of 4.6 percent of GDP in the fiscal year that ended in March 2012. The government must push consolidation to help reduce inflation and the current account deficit, the report said, warning that an expected rise in global oil prices could again force New Delhi to overshoot its spending target.

    Continued policy uncertainty and more fiscal slippage "would weaken investment sentiment and result in softer near-term growth and an erosion of longer-run prospects," the OECD said, though adding that India's pace of growth could overtake China's by 2020.

    http://m.timesofindia.com/PDATOI/articleshow/13392817.cms
     
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  3. badguy2000

    badguy2000 Respected Member Senior Member

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    By 2020, Chinese per capital GDP might be 20K USD and will have be a fully developed economy already.....
    it is hardly meaning for india to have a
     
  4. Yusuf

    Yusuf GUARDIAN Administrator

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    Good for you. What's the relevance to this thread?
     
  5. Koovie

    Koovie Regular Member

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    ya, we all know that India is behind China, but you could still try at least to use capital letters for the name of our country.
    Anyway good for China. Chinese government has really made impressive improvements during the last decades, especially by lifting hundreds of million poeple out of poverty and keeping up the growth.
     
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  6. panduranghari

    panduranghari Senior Member Senior Member

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    You are speculating. You have no idea of the future. Besides you are quite clueless when it comes to concept of developed economy. Do you even know what a developed economy means?

    Hong Kong is a developed economy, Singapore is not. Could you explain why? I am sure if you can explain this well I will accept you know what you are talking about,
     
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  7. panduranghari

    panduranghari Senior Member Senior Member

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    I am waiting for the earlier poster to state his answer. And I don't feed trolls.
     
  8. ice berg

    ice berg Senior Member Senior Member

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    That is rich coming from someone who believes Hong kong is a developed economy , but Singapore is not.

    It baffles me that in here people who question that is labelled as trolling and flamebait.

    While comments like this are considered ok:
    "You are speculating. You have no idea of the future. Besides you are quite clueless when it comes to concept of developed economy. Do you even know what a developed economy means? "

    Well, I rest my case then. :cool2:
     
  9. no smoking

    no smoking Senior Member Senior Member

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    You guys are bad boys.

    You can't just stay away when our indian friends are having their high time? Prediction is prediction, it may be correct or incorrect. You really can't prove which one is right. That is why everybody loves to make a prediction based on their own taste.
     
  10. satish007

    satish007 Senior Member Senior Member

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    why don't focus on now, 2012 just passed a few months, if india has no idea how to quicken in 2012,
    come to China, Chinese will help with pleasure.
    and then india economic will growth to unbelievable quicken in 2013
     
  11. no smoking

    no smoking Senior Member Senior Member

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    No, indian doesn't need chinese help: if india failed to make its target, you can always publish a news in some papers: India's economic growth to quicken in 2014-economists say so!

    Sorry, I know that I am a naughty boy too.
     

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