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One little blow to their beliefs and they all go screaming "sub prime mortgage crisis - sub prime mortgage crisis". It sounds like an India's version of, "Iraq has weapons of mass destruction -- bomb them!!!"
I mean, its been a while since the world has come to realize that growth on steroids gets you nowhere. At best what you get is a polished version of Taiwan. We in India should be thankful that things are not that bad for us because at the end of it all - we are good with money. The reforms and foreign policy of the nation have kept us shielded from tremors to a large extent.
When yesterday, the Economic Advisory Council (EAC) projected that the GDP is expected to grow at 7.7% for 2008-2009 and NOT 9%, it didn't come as a shock to me. In my post on August 10th titled "India 2012: Whats in Store?", I had already mentioned that as per the data by Global Insight, the GDP is expected to grow at about 7.5% for the current year.
I don't attribute this to the mortgage crisis and rising global commodity prices alone, or to crude oil for that matter. This is a sign for the economy breathing now and coming to peace with the fact that we can't run before we learn to walk.
4 comments:
Not sure if we can be oblivious to factors such as sub prime crises and rising crude oil prices..considering the interdependancy between nations and also the factthat the growthin India is strongly driven by the foreign investments, rather than domestic growth across various sectors..with a dent in these investments a country like India is bound to suffer.
agreed that we cant ignore these factors, but what i am trying to say is that everytime an economy running on steroids slows down a little, we can't just cry out loud and pin it on sub-prime mortgage crisis...
Sub Prime Crisis will never effect India as our credit lending system is always at the maximum funding only 80% of the total project cost. As for the inflation its a passing cloud. Just wait till 15 sep and it will come down. GDP will also go up.
i won't bet on the GDP to grow by more than 7.5% to 7.7% this year. The long term inflation target that RBI wants to meet will take quite a while to achieve. Inflation always decelerates slower than the rate at which it accelerates.
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