India's economic growth to decline: ADB
India's Gross Development Product (GDP) will slow down to 8% in the next
fiscal (2008-2009) from last year's growth rate (8.7%) following to
current
moderation that came in the last quarter of the past fiscal. while in the
year (2009-10) the GDP is expected to jump up again to 8.5% on the basis
of
boosting consumer spending and more accommodative monetary policy, said
Asian Development Bank (ADB) in its latest released book 'Asian
Development
Outlook,' 2008 on Wednesday
The Asian Development Outlook has also predicted about the inflation rate
that is going to slightly moderate to 4.4% from last fiscal (4.5%) while
in
2009-10 it is estimated to raise again to 5% in the response of growth
rebounds and monetary policy.
The Manila based ADB (Asian Development Bank) has mentioned that United
Progressive Alliance (UPA) are determined to curb the inflation rate and
to
hike the total growth rate of India. Still India could not sustain its
current momentum because the inflation rate depends upon the two crucial
factors, the level of domestic production and the course of international
commodity prices, which puts dogmatic impact on any country's Inflation
and
GDP.
"Despite growth moderating, we still feel that Asia, including India, does
have favourable policy conditions," said ADB's (Resident Mission)
Principal
Economist Narhari Rao on the occasion of book-release. "We feel that
productivity growth linked to economic modernisation and structural
transformation will continue, which basically means that these economies
will continue to invest and continue to grow," he further said.
"The country needs to meet the macroeconomic challenges to ensure the
current deceleration remains mild in the face of global market turmoil and
economic slowdown," said Ifzal Ali, Chief Economist of ADB.
On the other hand, in the private sector, the growth rate will continue to
more than 6% in the current fiscal (2008-09) because of huge wage gains,
income tax relief, debt waiver for the farmers, high prices for cash crops
and pay hikes for civil servants in the presented budget for year 2008-09.
In the inflation term, the inflation rate of India is likely to nearby
4.5%
in the fiscal 2008-09 because of critical price hike in food and fuel. The
local supply of food grains and vegetables will also be affected because
of
insufficient sowing of the winter crop and that also looks possible in the
summer crop in 2008.
In the last fiscal, the low-cost ex****t business include textile and
handicrafts were badly affected from rupee appreciation and government had
to sup****t the ex****ters by allocating them extra relief package. Similar,
the higher value-added sectors like business services, Information
Technologies, and capital-intensive manufacturing ex****ts were also
affected
but could able to earn profit (however, the margin money declines as
against
2006-07). The ADO assumes that rupee-dollar exchange rate is likely to
stable in the next two fiscals.
The growth rate in the im****t sector will continue to higher viewing the
broad market of consumption and large investment. The current account
deficit is expected to 2.2 % in 2008-09 and 2.6% in 2009-10 while ex****t
rate will cross the 16% ceiling in 2008-09.
Asian Development Bank is situated at Manila, the capital of Philippines
that was established in 1966 to eradicate poverty from Asia and Pacific
region via pro-poor sustainable economic growth, social development, and
good governance. At present there are 67 members of which 48 represent the
regions. In the year 2007, ADB had approved a total of USD10.1 billion in
terms of loans, USD 673-million as a grant for the projects, and USD
243-million as a technical assistance.
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