India is considered as one of the best players in the world economy in the past few decades, but rapidly increasing inflation and the intricacies in administering the world's biggest democracy are acting as the major hurdle in the field of development.
Indian economy in recent years has been consistently performing with flying colors, escalating 9.2% in 2007 and 9.6% in 2006. This uninterrupted expansion is assisted by markets restructuring, huge infusions of FDI, increasing foreign exchange reserves, boom in both IT and real estate sectors, and a thriving capital market.
The latest reviews of the India GDP growth rate are as under
- For the first quarter of 2007-08 GDP posted a growth of 9.3% and stood at Rs 7,23,132 crore, as compared to the consequent quarter of previous fiscal year
- In the quarter of April-June economy of India grew at 9.3%. The progress was triggered by construction, manufacturing, services and agriculture industries
- For the week concluded July 28, 2007, the yearly inflation rate was 4.45%
- Balance of Payments in India is predicted to remain contended
- Merchandise Exports registered steady growth
- Manufacturing posted 11.95 expansion
Difference between GDP and GDP Growth Rate
Retail spending, government expenses exports and inventory levels determine GDP growth rate. Elevation in imports will affect GDP growth in a negative way.
Economic strength of a nation is indicated by the GDP growth rate. Development in GDP will eventually boom business, employment opportunities and personal income. On the flip side, if GDP slows down, then business ventures and already established enterprises will come to a halt. This will call off monetary infusion in new purchases, tie-ups and recruiting new employees till the economy gain pace. As a result the GDP further deteriorates because the consumers do not have sufficient money to spend on buying a product or service.
India GDP growth rate in 2009
According to International Monetary Fund (IMF) economic growth rate of India is predicted to dip by 6.9 per cent in the fiscal year 2009. IMF has further stated that this relegation is unavoidable because the Asian nations are not fully impervious to the global financial crisis and its consequent negative effects.
IMF's World Economic Outlook (WEO), released in Washington on October 8, 2008, explains the slopping of GDP growth rate in the last three years. In 2007 GDP growth rate was 9.3 per cent while in 2008 it dipped to 7.8 per cent and would end up at 6.9 per cent in 2009.
The analysis also asserted that Asia's economic growth rate is expected to undergo a negative transition in the coming fiscal year. Year 2008 witnessed a 7.7 per cent decline in GDP growth rate of Asia which would eventually end up at 7.1 per cent in 2009. Financial market worldwide underwent a severe slowdown after the September 08 market turmoil and is becoming financially fragile day by day.
The weak financial market is incapable of attracting investors' attention. India has also suffered a major setback in the year 2005-07 according to IMF, when the worldwide stock markets slipped radically.