Wednesday, February 29, 2012

Indian Economy Slows To Weakest in 3 Years

Reuters reports today that the Indian economic growth slowed to 6.1% in the three months ending in December, the weakest annual pace in almost three years, as high interest rates and rising raw material costs constrained investment and manufacturing.

"The dismal numbers are certain to intensify pressure on the authorities to stimulate the flagging economy and they render official forecasts for 6.9 percent growth in the financial year ending in March as optimistic.
Yet economists doubt much stimulus will be forthcoming as a fiscally constrained government focuses on finding money for fuel and food subsidies to win votes and rising oil prices urge caution at the central bank over cutting rates too quickly.

The 6.1 percent rise in gross domestic product in October to December was lower than the consensus view in a Reuters poll of 6.4 percent, the official data showed.
That marked a sharp pullback from 6.9 percent growth in July to September and was the seventh successive quarterly slowdown, providing a gloomy backdrop for a central bank policy meeting and federal budget, both due in just over two weeks".

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