India’s slower economic growth

India’s slower economic growth

WO-AN981_IECON_NS_20130531182708The GDP Gross Domestic Product rose only 5.0 % (6.2 % 2012) in the fiscal year ending March 31, or the lowest rate in a decade. Before the worldwide financial crisis India enjoyed growth rates above 9.0 %

During January to March 2012 output was 4.8 % as against the previous quarter (4.7 %). The government narrowed the fiscal deficit to 4.9 % of GDPP in the last fiscal year but still away from the set target of 3.0 % and there are rumours that India’s sovereign debt could be soon downgraded to non-investment grade status. As we all know, India’s government has so far failed to accelerate economic growth by making the needed investments in infrastructure, however measures are taken to lower expensive state subsidies on fuel, raising taxes to curb gold imports. These two areas are the main driver of India’s record high trade deficit. Experts are voicing the opinion that the government should allow greater foreign investment in some other sectors, including local pension fund management companies and insurance firms. In any case the economic growth is not sufficient to create enough new jobs necessary to accommodate young people entering the work market.

The newest data show further that manufacturing output slowed to 1.0 % (2.7 %) in the last fiscal year. Growth in services such as hotels and transport slowed to 8.6 % (11.7 %) and farm output growth slowed to 1.9 % (3.6 %). In the last quarter the industrial output grew 2.6 % and farming 1.4 %. The volume of investments increased 3.5 % (4.5 %). It has to be noted that the central bank decreased the leading interest rate by 0.75 % since 2013, however the business community considers this as to be not sufficient.

 

 

 

The latest available trade figures and India’s ten major trade countries can be had from the tables below.

India
Top 10 Export Partners in 2012

US Dollars, Millions

export_grafik

  2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
United States 11363.89 12839.27 16475.21 18515.46 20285.37 20851.50 18280.02 23611.47 33359.49 37486.00
United Arab Emirates 4676.05 6605.00 8280.81 11172.07 14728.22 21847.56 20666.70 29507.38 38772.97 36488.88
China, P.R.: Mainland 2710.18 4178.48 6473.30 7910.25 10195.07 9663.86 10154.95 17518.98 19113.15 14859.28
Singapore 1949.02 3377.84 5069.12 5908.02 7042.89 7997.11 6721.49 9093.86 16147.32 14683.37
China, P.R.: Hong Kong 3099.69 3553.95 4276.45 4628.26 5899.06 6572.55 6938.38 9518.15 12643.10 12144.02
Netherlands 1228.81 1460.82 2257.30 2621.34 4586.72 6016.29 6407.17 6578.59 9733.99 10025.04
Saudi Arabia 1077.66 1308.14 1710.34 2393.57 3426.91 4667.57 3730.49 4499.91 5645.56 8615.00
United Kingdom 2892.29 3414.68 4714.85 5478.64 6428.42 6620.63 6182.83 6421.50 8788.65 8261.98
Germany 2435.08 2619.21 3396.15 3881.19 4832.18 6037.02 5451.10 5997.47 8247.68 7162.91
Japan 1747.97 1910.52 2392.92 2767.34 3606.01 3214.07 3186.04 4812.81 5663.55 6741.50
Source: Direction of Trade Statistics (DOTS)
Data extracted from IMF Data Warehouse on: 6/2/2013 3:46:46 AM

Top 10 Import Partners in 2012
US Dollars, Millions

import_grafik

  2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
China, P.R.: Mainland 3737.92 6073.29 9925.53 15812.51 24691.96 30275.99 28839.64 41332.61 55299.34 53983.98
United Arab Emirates 1784.12 3951.43 4425.83 7581.68 12267.26 18821.19 15417.90 30976.81 35656.71 37778.64
Saudi Arabia 679.50 1130.10 1549.54 10446.01 17896.82 19470.01 14602.80 20406.52 28321.09 32859.11
Switzerland 3067.09 5191.62 6402.56 8482.03 9655.23 11043.54 10222.32 22292.20 31567.73 28909.33
United States 4890.38 5981.21 8848.42 11172.88 18708.40 18888.48 16643.61 19135.63 23454.08 24201.35
Iraq 0.11 0.86 1.82 4145.04 6503.38 7298.05 5841.25 7301.44 17525.06 19295.32
Kuwait 151.74 255.75 422.88 4609.58 7265.44 8966.88 7534.97 9031.75 14647.28 17846.59
Qatar 168.56 525.95 844.43 1776.65 2359.24 3206.00 4106.87 6155.80 11282.84 16204.86
Germany 2790.05 3630.87 5521.56 7165.65 9288.84 11238.13 10721.63 11471.57 15274.87 14965.93
Nigeria 76.26 55.02 66.45 5288.32 7468.80 8425.96 5674.82 10297.60 13750.21 14043.13
Source: Direction of Trade Statistics (DOTS)
Data extracted from IMF Data Warehouse on: 6/2/2013 3:46:46 AM

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