Economy bounces back to record 5.7% growth, highest in over two years

[UKBengali]

Abey chutiye....tuney economics kaha sey padi hai???

tujhey INDIA or Lanka/BD me Difference samajh me ata hai???

What are you blabbering on about?

 

[kaykay]

You guys are cheering up over quarterly growth? I thought it was annual GDP growth.


Childish.

Well quarterly growth eventually affects annual growth so I don't find any reason not to cheer it. Also we are cheering because now it seems out economy is once again on track of higher growth rate as 1% increase in 3 months says itself.

 

[As is - where is]

Reserve Bank of India Gov. Rajan: Inflation on Target - WSJ

A former chief economist for the International Monetary Fund who became governor of the Reserve Bank of India last September, Mr. Rajan has previously said he wants to see consumer-price inflation slow to 8% by January and 6% by 2016.

Mr. Rajan, who as governor has final say over interest-rate setting, left the RBI's main policy interest rate unchanged at 8% earlier this month, citing slowing inflation that was still too high for comfort.

Consumer prices rose 7.96% in July, compared with a year earlier, after climbing 7.46% in June, the slowest rate of increase since India started computing the current consumer-price index in 2012.

Mr. Rajan's hawkish inflation stance has attracted criticism. Before India's new prime minister, Narendra Modi, took office in May, some officials of his Bharatiya Janata Party complained about the governor's inflation focus.
They argued that higher interest rates wouldn't necessarily prevent inflation in a market like India, where production bottlenecks contribute to price rises, but could choke off economic growth.
Mr. Rajan on Wednesday said high inflation hampers growth by introducing a high degree of uncertainty, which among other things affects companies' investment decisions.
Ultimately, he said, lower inflation will be beneficial for the economy, and the process of cooling prices won't hurt business. "The path was set keeping in mind that […] we could achieve it without a huge amount of pain," he said.

Why do they even call him hawkish? He just wants to bring inflation down from 8% to 6% in two years. The Russians have a similar inflation rate and they are trying to bring it down at any cost. This Rajan guy seems pretty cool if you ask me.

 

[sancho]

Sorry but I disagree. Confidence in government is the key thing here. else 4.7 to 5.7 is not very usual.

Not really, confidence might change the value of shares, but only policy changes and reforms actually changes growth and the reasons for the returning growth is well known and even admitted by the new government! Better situation of foreign countries, which increases exports from India and investments into India! The NDA didn't changed much so far, infact they disappointed foreign vendors by sticking to the taxation policies of the UPA2, but the improvements to strengthen the Rupee and to increase interest in India again, were done by last year and are kicking in as expected this year. In Jan or Feb Mr Chidambaram's forcast was no less than 5% this year and up to 7% within the next 2 years. Many foreign Banks and even the IMF were even more optimistic and that before the elections or the new government took over.

Global Economy at Turning Point, Says World Bank
January 14, 2014

...Growth in South Asia expanded a modest 4.6 percent in 2013, reflecting weakness in India amid high inflation, and current account and government deficits. More recently, regional exports have recovered, because of strengthening external demand and the earlier depreciation of the Indian rupee. Regional growth is projected to improve to 5.7s percent in 2014, rising to 6.7 percent in 2016, led mainly by recovering import demand by high-income economies and regional investment. The projected pickup, however, will depend on macroeconomic stability, sustained policy reforms, and progress in reducing supply side constraints. India’s growth is projected to rise to over 6 percent in FY2014-15, increasing to 7.1 percent by FY2016-17.

Global Economy at Turning Point, Says World Bank

 

[Nova2]

Indians, as usual, celebrating before anything really good has happened

India is still the 3rd fastest growing major economy in South Asia- behind Sri Lanka and BD.

Personally I think that Modi will push GDP growth to 7-8% a year average IF he can get a 2nd term. For the 1st term 6-7% a year is achievable.

Can you be a little specific and share how Indian economy could manage just 6-7% of growth by 2019 ??

 

[sancho]

In 2019 this is going to be Congress's poll campaign.

If they had been smarter, they would had pointed out the good things they actually did in this elections and the BJP surely is smart enough to use the current improvements based on UPA policies as their own, just as they simply re-named several UPA policies too. But that's politics! Important however is, that the voter / public don't fool themselfs by such PR and tries to understand what is true and what's not. The NDA has 5 years to do good things for India now and I'm sure there will be good things, but the current improvement of growth and the Rupee are surely not based on their doing, just as the clearing Apache and Chinook deals is not Arun Jaitley's doing, since that was done in the last FY anyway and just passed over to the new government as simple as that.

 

[UKBengali]

Can you be a little specific and share how Indian economy could manage just 6-7% of growth by 2019 ??

Dude - the top end of the range is 7% a year average.

In the first year of Modi government say you hit 6% and then you are below my 7% a year forecast. There is no way that Indian average GDP growth will hit anymore than 7% a year average as you need to start hitting 8 and 9% a year GDP growth in the latter years of the Modi government to achieve say 8% a year average in the 2014-2019 period.

Modi will be using his first term, assuming he gets a second term, in sorting out the fiscal mess that India was brought into by Congress, and also enacting reforms to allow the infrastructure investment and ease of doing business to try to propel India to a higher growth trajectory in his 2nd term. I think he can just about manage 8% a year average if he gets a 2nd term

 

[ares]

Indians, as usual, celebrating before anything really good has happened

India is still the 3rd fastest growing major economy in South Asia- behind Sri Lanka and BD.

Personally I think that Modi will push GDP growth to 7-8% a year average IF he can get a 2nd term. For the 1st term 6-7% a year is achievable.

Please do not include words like Bangladesh, Srilanka and major economy in the same sentence...Your economies do no even figure in top 30 economies of the world is not even 1/10th size of India's.

Otherwise Afghanistan is the fastest growing economy in the region with a consistent double digit growth for past one and half decade.

 

[UKBengali]

Please do not include words like Bangladesh, Srilanka and major economy in the same sentence...Your economies do no even figure in top 30 economies of the world is not even 1/10th size of India's.

Otherwise Afghanistan is the fastest growing economy in the region with a consistent double digit growth for past one and half decade.

OK. Maybe "major" was not the best word to use as Sri Lanka was included. For South Asia India, BD and Pakistan are the three major economies in the region.


In that case BD is leading, India 2nd and Pakistan 3rd.

 

[ares]

OK. Maybe "major" was not the best word to use as Sri Lanka was included. For South Asia India, BD and Pakistan are the three major economies in the region.


In that case BD is leading, India 2nd and Pakistan 3rd.

If you say South Asia (which only has 8 countries in the world), then yes Bangladesh will be the third largest economy and Pakistan second largest economy but then again difference wrt India is huge.
Pakistani economy is about 1/9th the size of India and Bangladesh less that 1/12th growing at 4% and 6% respectively.

But then again if you are comparing dis-similar things then, then Afghan economy is about 1/6th the size of Bangladesh and growing at almost twice the rate.

 

[SR-91]

Not really, confidence might change the value of shares, but only policy changes and reforms actually changes growth and the reasons for the returning growth is well known and even admitted by the new government! Better situation of foreign countries, which increases exports from India and investments into India! The NDA didn't changed much so far, infact they disappointed foreign vendors by sticking to the taxation policies of the UPA2, but the improvements to strengthen the Rupee and to increase interest in India again, were done by last year and are kicking in as expected this year. In Jan or Feb Mr Chidambaram's forcast was no less than 5% this year and up to 7% within the next 2 years. Many foreign Banks and even the IMF were even more optimistic and that before the elections or the new government took over.



Global Economy at Turning Point, Says World Bank

Confidence level also plays its role. Just because you have confidence in your govt, you will spend more, you will take risk to grow faster, thereby contributing and stimulating your economy.

Consumer confidence index - Wikipedia, the free encyclopedia

 

[SrNair]

OK. Maybe "major" was not the best word to use as Sri Lanka was included. For South Asia India, BD and Pakistan are the three major economies in the region.


In that case BD is leading, India 2nd and Pakistan 3rd.

Lol .Dont embarass yourself .
Pakistan GDP is almost equal to our Maharashtra State.BD is much lesser than that

 

[UKBengali]

Lol .Dont embarass yourself .
Pakistan GDP is almost equal to our Maharashtra State.BD is much lesser than that

BD GDP is around 170-180 billion, depending on who you believe.

What is Maharashtra State then?

 

[sancho]

Confidence level also plays its role. Just because you have confidence in your govt, you will spend more, you will take risk to grow faster, thereby contributing and stimulating your economy.

Confidence is an indicator, but not a game changer! The confidence doesn't get the common man more money to spend, especially when the government is even increasing the price rise, rather than reducing it. It's nice that mobiles or flatscreen TVs now costs less, but people that have to pay more and more for gas, energy, public transportation and even basic food, won't have the money to buy a new TV right?
And as I mentioned earlier, many foreign vendors were disappointed by the government not going for credible tax reforms and that certainly didn't increased their confidence in the government, but that doesn't mean India would not be an attractive place to invest (now when money is free again to invest abroad) or that India is not a good place to import from. It's not like UPA2 made India less attractive, but that the global situation was not good enough to boost our economy more, nor to invest in India. The UPA did reacted to that and we see the results now, NDA will do reforms too and we will see results of that in future too.

 

[Nova2]

Dude - the top end of the range is 7% a year average.

In the first year of Modi government say you hit 6% and then you are below my 7% a year forecast. There is no way that Indian average GDP growth will hit anymore than 7% a year average as you need to start hitting 8 and 9% a year GDP growth in the latter years of the Modi government to achieve say 8% a year average in the 2014-2019 period.

Modi will be using his first term, assuming he gets a second term, in sorting out the fiscal mess that India was brought into by Congress, and also enacting reforms to allow the infrastructure investment and ease of doing business to try to propel India to a higher growth trajectory in his 2nd term. I think he can just about manage 8% a year average if he gets a 2nd term

Assumption are good for self consumption. If you have any thing to backup your claim then sure do it.

In the first year of Modi government say you hit 6% and then you are below my 7% a year forecast.

I don't know what are you talking about. Indian govt has not projected the economy to grow at 6% in the 1st Q ,estimation was at 5.3% but has grown at 5.7% in 1Q of 2014.
There you go ,IMF projection of Indian economy in the 1Q of 2014--
IMF Paints Positive Picture for Indian Economy in 2014 - India Real Time - WSJ
That was the estimate of 5.4% but the results have outperformed @5.7 in Q1
Economy grows 5.7%, clocks fastest growth in 2 yrs - Hindustan Times
World bank projects 5.5% in 2014 &
6.4% in 2015
South Asia
So 8% in 4yrs? by 2019 ,ain't an impossible task like u make it sound to be,investment and reforms are what will propel it to 8% ,and its happening ,outlook is positive as far as Investing in India is concerned .so i guess,its better to wait for Q2 results that would be released in November,that could give a better picture of how thing would turn out to be, and btw if you think Modi would come back in power in 2019 with just 7% growth rate ,then you horribly wrong.