Is the IMF’s GDP growth forecast of 5.1% for India in 2009 too grim?

by Véronique Queffélec on février 1, 2009


BusinessWorld (Indian magazine)  06 Feb 2009

Is the IMF’s GDP growth forecast of 5.1 per cent for India in 2009 too grim?

Quick Take

It’s not a secret that like others, the highly indian economy is now facing harder times affected by the deteriorating outlook for some of its main trading partners. By its Stock Exchange sliding all year, by Satyam’s scandal. As it’s global credit running dry. Even Tata Motors, one of India’s biggest companies, has been struggling to keep its hands on equity. India’s economy is slowing and confidence is weak. Previously soaring foreign investment in India is expected to decrease and much more since last blasts. Nobody yet knows how serious the slowdown will be.

But, a fact is that a recession in the developed countries should hurt India less than other emerging markets: because exports amount are only about 21% of India’s GDP, against 38% of China’s. Another one is that India has much more good social, educational, democratic, demographic as well as creative parameters than others emerging countries. These aren’t included in IMF or WB’s statistics.

On the World diplomatic chessboard India has also started to matter more. The US-India nuclear co-operation agreement, which was approved by America’s Congress in 2008, was the obvious mark of this: to let India in from the nuclear cold, the industrialized countries has made an exception to the counter-proliferation system. The Congress Party can take much credit for this. Now it’s a transition because of last Budget Starting on February 23rd and electoral background. After Next Union elections, Indian Government ‘ll take new ways to impulse its economy. And then IMF’s GDP forecast of 5,1% for India ‘ll be quickly corrected.