Home / Knowledge / News / GDP growth forecast at 7.8% for 2008-09
GDP growth forecast at 7.8% for 2008-09
26
Jun '08
The Indian economy is expected to be adversely affected by the surge in inflation fuelled by energy and commodity prices. Despite signs of growth slowing down from last year, the Reserve Bank of India has already hiked interest rates twice during June to deal with inflationary pressures and may well do so again. Higher interest rates are expected to moderate growth even further.

Dr. Subir Gokarn, Chief Economist, Standard & Poor's Asia Pacific, said: "We expect the inflation rate to average 8.5% to 9.0% during 2008-09. Food price scenarios have improved somewhat, given comfortable levels of wheat stocks and expectations of a normal monsoon this year.

However, high oil prices, strong input costs, and a depreciating rupee continue to exacerbate inflationary and other pressures. High interest rates, along with a slowing global economy, will trim GDP growth to 7.8% in 2008-09. We see the yield on 10-year government securities at 8.5% to 8.7% by fiscal year-end."

Rising inflation, a forecast slowdown in economic growth, and turmoil in the global financial markets have dampened investor confidence and led to foreign capital outflow. This has led the rupee, which was already under pressure from a rising oil import bill, to depreciate as sharply this year as it appreciated in 2007.

We expect India's current account deficit to swell to about 2.6% of GDP. The rupee should remain at about its current level for the major part of the current financial year, before appreciating to INR41-41.5/US$ towards the end of the fiscal year, as global market conditions become more stable and oil prices moderate.

Fiscal improvements in the past few years are likely to be reversed this year, due to a surge in oil, fertilizer, and food subsidies. The central government's fiscal deficit (including off-budget liabilities) is an estimated 6.2% of GDP, compared with the budgeted 2.5% (excluding off-budget liabilities). The consolidated fiscal deficit of central government and states should touch 8.5% of GDP.

Mr. Dharmakirti Joshi, Principal Economist, CRISIL, added: "After four years of noteworthy fiscal consolidation, a reversal is on the cards in 2008-09. The fiscal improvement was supported by very strong revenue gains, particularly from direct tax. These gains are now being offset by the sharp surge in the subsidy burden from petroleum products and fertilizers.

The Sixth Pay Commission and a farm loan waiver will add to the fiscal stress this year. Despite the deterioration, the situation is not yet as bad as it was in the beginning of this decade when the consolidated deficit of the centre and states was above 10% of GDP."

Credit Rating Information Services of India Limited


Must ReadView All

Pakistan govt notifies 50% duty drawback on exports

Textiles | On 21st Oct 2017

Pakistan govt notifies 50% duty drawback on exports

The Pakistan government has notified the ‘Duty Drawback of Taxes...

Ghana sets up task force to clamp down on textile piracy

Textiles | On 21st Oct 2017

Ghana sets up task force to clamp down on textile piracy

Ghana’s ministry of trade and industry has set up a taskforce to...

Courtesy: Coach

Fashion | On 21st Oct 2017

US company Coach to change name to Tapestry from Oct 31

Coach Inc., a New York-based house of modern luxury accessories and...

Interviews View All

Spokesperson
Hugo Boss

'Hugo Boss works with carefully selected sourcing partners'

Viral Desai
Zenitex Mill Pvt Ltd

Full of green energy

Smith Vaghasia
Sanado India

Online remains the best destination for shopping

Harsh Shah

Established in 1956 with a small beginning, Embee today manufactures a...

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

October 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
76.8%
No
13.0%
Skip
10.1%

Total Votes: 69

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
62.3%
No
27.5%
Skip
10.1%

Total Votes: 69

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
85.5%
No
10.1%
Skip
4.3%

Total Votes: 69

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
75.4%
No
11.6%
Skip
13.0%

Total Votes: 69


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search