Indian Economy: News and Discussion
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India's Economy Slows, With Global Implications http://www.nytimes.com/2012/05/30/world/asia/indias-economy-struggles-after-big-hopes.html?ref=asia
LETHALFORCE
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India to be $2-trn economy by FY13-end?
India to be $2-trn economy by FY13-end?
India to be $2-trn economy by FY13-end?
India may turn into a $2-trillion economy by the end of this financial year, provided the rupee remains below 50.79 against the dollar during this period. The government has projected India's gross domestic product (GDP) for 2012-13 at Rs 101 lakh crore, against Rs 88 lakh crore in 2011-12—a growth of 14.7 per cent.
In 2011-12, when the rupee stood at an average of 47.95 against the dollar, the size of the economy was $1.84 trillion at current prices (including indirect taxes). A growth of 14.7 per cent would mean the economy would expand to $2.11 trillion.
The catch, however, is the rupee stood at 47.95 against the dollar in 2011-12, while its average exchange rate against the dollar so far this financial year is 53.24. At this rate, by the end of 2012-13, India would be a $1.9-trillion economy. Any further depreciation in the rupee would further reduce the size of the economy in dollar terms.
On Thursday, the rupee fell to a record low of 56.52 against the dollar. It has depreciated 14 per cent from its high this year, exerting pressure on the trade and current accounts.
With limited foreign exchange reserves and reforms unlikely, analysts expect the rupee to depreciate further in the coming days, with a recovery unlikely anytime soon. "The high inflation, sluggish growth, poor flows and the strengthening dollar index would continue to drive the rupee to new lows. We expect the rupee to breach 57-levels soon," said Abhishek Goenka, chief executive, India Forex Advisors.
In 2010-11, when the rupee stood at an average of 45.57 against the dollar, India's GDP stood at $1.68 trillion, while it was $1.36 trillion in 2009-10, at an average exchange rate of Rs 47.42/dollar. GDP growth at constant prices (excluding indirect taxes) stood at 5.3 per cent in the quarter ended March 31, with growth in financial year 2011-12 at 6.5 per cent—the lowest in nine years.
"This persistent sluggishness in the economy puts the Reserve Bank of India in a conundrum. It has to cut interest rates to stimulate growth. However, it can't cut much, as this would lead to more depreciation in the rupee," said Bundeep Singh Rangar, chairman of London-based consulting firm IndusView.
Though the central bank had cut policy rates by 50 basis points in April, it had warned it saw limited scope for more any cuts, partly because inflation remained high.
India to be $2-trn economy by FY13-end?
India to be $2-trn economy by FY13-end?
India may turn into a $2-trillion economy by the end of this financial year, provided the rupee remains below 50.79 against the dollar during this period. The government has projected India's gross domestic product (GDP) for 2012-13 at Rs 101 lakh crore, against Rs 88 lakh crore in 2011-12—a growth of 14.7 per cent.
In 2011-12, when the rupee stood at an average of 47.95 against the dollar, the size of the economy was $1.84 trillion at current prices (including indirect taxes). A growth of 14.7 per cent would mean the economy would expand to $2.11 trillion.
The catch, however, is the rupee stood at 47.95 against the dollar in 2011-12, while its average exchange rate against the dollar so far this financial year is 53.24. At this rate, by the end of 2012-13, India would be a $1.9-trillion economy. Any further depreciation in the rupee would further reduce the size of the economy in dollar terms.
On Thursday, the rupee fell to a record low of 56.52 against the dollar. It has depreciated 14 per cent from its high this year, exerting pressure on the trade and current accounts.
With limited foreign exchange reserves and reforms unlikely, analysts expect the rupee to depreciate further in the coming days, with a recovery unlikely anytime soon. "The high inflation, sluggish growth, poor flows and the strengthening dollar index would continue to drive the rupee to new lows. We expect the rupee to breach 57-levels soon," said Abhishek Goenka, chief executive, India Forex Advisors.
In 2010-11, when the rupee stood at an average of 45.57 against the dollar, India's GDP stood at $1.68 trillion, while it was $1.36 trillion in 2009-10, at an average exchange rate of Rs 47.42/dollar. GDP growth at constant prices (excluding indirect taxes) stood at 5.3 per cent in the quarter ended March 31, with growth in financial year 2011-12 at 6.5 per cent—the lowest in nine years.
"This persistent sluggishness in the economy puts the Reserve Bank of India in a conundrum. It has to cut interest rates to stimulate growth. However, it can't cut much, as this would lead to more depreciation in the rupee," said Bundeep Singh Rangar, chairman of London-based consulting firm IndusView.
Though the central bank had cut policy rates by 50 basis points in April, it had warned it saw limited scope for more any cuts, partly because inflation remained high.
p2prada
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Re: India to be $2-trn economy by FY13-end?
Mrs Congress has been borrowing too much money. As much money was lost in the scams.
RBI messed things up saying they won't protect the Rupee.
Now they wonder what's happening!
They said our leadership had top economists in them. Now it seems like education stands for sh!t when it stands up to Mrs CONgress and family.
Mrs Congress has been borrowing too much money. As much money was lost in the scams.
RBI messed things up saying they won't protect the Rupee.
Now they wonder what's happening!
They said our leadership had top economists in them. Now it seems like education stands for sh!t when it stands up to Mrs CONgress and family.
no smoking
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Re: India to be $2-trn economy by FY13-end?
14.7% growth?
Does it take out the inflation rate?
If it does, it is quite impressive!
14.7% growth?
Does it take out the inflation rate?
If it does, it is quite impressive!
LETHALFORCE
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Re: India to be $2-trn economy by FY13-end?
India is not an export based economy.
India is not an export based economy.
Re: India to be $2-trn economy by FY13-end?
$2 trillion will be in two years, i,.e in March 2014 and not next year. also the Indian rupee has taken a dip, so it depends how you look at it. the 14.7% growth is a nominal GDP growth and not the
real GDP growth. I don't how it is calculated, I think it includes inflation as well. But in that case if some country has 20% inflation no growth, then also it's nominal GDP will grow.
$2 trillion will be in two years, i,.e in March 2014 and not next year. also the Indian rupee has taken a dip, so it depends how you look at it. the 14.7% growth is a nominal GDP growth and not the
real GDP growth. I don't how it is calculated, I think it includes inflation as well. But in that case if some country has 20% inflation no growth, then also it's nominal GDP will grow.
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Re: India to be $2-trn economy by FY13-end?
it depends on exchange rate of Rupees..
inflation and the exchange rate plays a role more than real growth here.
it depends on exchange rate of Rupees..
inflation and the exchange rate plays a role more than real growth here.
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Re: India to be $2-trn economy by FY13-end?
well, in 2 years, China's economy might surpassed 10 trillion USD, inflation and exchange rate considered.
Re: India to be $2-trn economy by FY13-end?
China is actually a investment based economy rather than export. Check out data yourself before just following the crowd.
p2prada
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Re: India to be $2-trn economy by FY13-end?
So, if Rupee is 50 to a Dollar, then our economy is $2Trillion.
This is without inflation.
In Rupee terms, GDP is at 100 Trillion.
So, if Rupee is 50 to a Dollar, then our economy is $2Trillion.
Exports grow 3.2% in April; weak rupee to help in long term
India's exports grew by a meagre 3.2 per cent year-on-year to $24.4 billion in April 2012, but are likely to gain momentum in the medium to long term on account of depreciating rupee.
Sharp deceleration in imports during the month resulted in trade deficit narrowing to $13.2 billion, the lowest in the last seven months. Imports during the first month of the current fiscal grew 3.8 per cent to $37.9 billion.
The drop in the balance of trade (BoT) deficit should reduce pressure on the rupee which has lost value by about 15 per cent against the U.S. dollar since September, 2011. It was ruling at Rs. 55.85 on Friday morning.
"The depreciation of rupee prima facie would help exporters in terms of higher realisation in terms of rupee...verall in the long term it would help the exporters," Finance Secretary R. S. Gujral said.
Although the exporters' community said that the rupee depreciation would help in the long term, buyers are pressuring for discounts.
"Buyers are asking for more and more discounts," Federation of Indian Export Organisations (FIEO) President Rafeeq Ahmed said.
Mr. Ahmed also said that the rupee weakening would make imports expensive but would have a favourable impact in trade deficit.
In 2011-12, the country's trade deficit jumped to $185 billion, the highest ever in history.
While the pace of export expansion dropped, the silver lining is that there was acceleration in the net value as opposed to deceleration in March when the shipments contracted by 5.7 per cent.
Commenting on the export growth for 2012-13, Commerce and Industry Minister Anand Sharma said, "I hope we will be able to achieve at least 20 per cent growth."
In 2011-12, the country's exports grew by 21 per cent to $303.7 billion.
http://www.thehindu.com/business/Economy/article3480028.ece
India's exports grew by a meagre 3.2 per cent year-on-year to $24.4 billion in April 2012, but are likely to gain momentum in the medium to long term on account of depreciating rupee.
Sharp deceleration in imports during the month resulted in trade deficit narrowing to $13.2 billion, the lowest in the last seven months. Imports during the first month of the current fiscal grew 3.8 per cent to $37.9 billion.
The drop in the balance of trade (BoT) deficit should reduce pressure on the rupee which has lost value by about 15 per cent against the U.S. dollar since September, 2011. It was ruling at Rs. 55.85 on Friday morning.
"The depreciation of rupee prima facie would help exporters in terms of higher realisation in terms of rupee...verall in the long term it would help the exporters," Finance Secretary R. S. Gujral said.
Although the exporters' community said that the rupee depreciation would help in the long term, buyers are pressuring for discounts.
"Buyers are asking for more and more discounts," Federation of Indian Export Organisations (FIEO) President Rafeeq Ahmed said.
Mr. Ahmed also said that the rupee weakening would make imports expensive but would have a favourable impact in trade deficit.
In 2011-12, the country's trade deficit jumped to $185 billion, the highest ever in history.
While the pace of export expansion dropped, the silver lining is that there was acceleration in the net value as opposed to deceleration in March when the shipments contracted by 5.7 per cent.
Commenting on the export growth for 2012-13, Commerce and Industry Minister Anand Sharma said, "I hope we will be able to achieve at least 20 per cent growth."
In 2011-12, the country's exports grew by 21 per cent to $303.7 billion.
http://www.thehindu.com/business/Economy/article3480028.ece
cir,
agri growth was 1.7% last year, way less due to high base effect. if agri goes to 3.3 as is expected, we will see grow around 7% growth. also mining and manufacturing is going to pick some pace this year. so 5.5% is wishful thinking.
agri growth was 1.7% last year, way less due to high base effect. if agri goes to 3.3 as is expected, we will see grow around 7% growth. also mining and manufacturing is going to pick some pace this year. so 5.5% is wishful thinking.
trackwhack
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sukhish, my friend, dont feed the troll
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Err.. our growth was only 5.3% for the Jan-March was it not? So how will it jump to 7% all of a sudden?
I think 7% growth is a wishfull thinking. Come on, lets be objective shall we?
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Not possible to achieve 7.6 per cent growth target: Montek Singh Ahluwalia
Montek estimates that GDP growth will be around 6.5%. If I remember correctly, Nomura has estimate our GDP growth at 5.8% which is what I think is most likely.
Montek estimates that GDP growth will be around 6.5%. If I remember correctly, Nomura has estimate our GDP growth at 5.8% which is what I think is most likely.
