Indian economic growth set to slow
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This BBC news report provides a good short case study on some of the causes of an slowdown in an economy. The expected rate of real GDP growth for India is forecast to dip in 2008. ‘High Indian interest rates have led to a stronger currency that could make the country’s exports more expensive on world markets’ and ‘India is expected to slow slightly in the coming year as a severe US downturn saps demand for exports.’ The article also emphasises how, despite a rapid economic transformation in recent years, the living standards of nearly seventy per cent of India’s population remains tied to the fortunes of her agricultural sector. India has grown by 9.4% and 8.7% in the last two years more than twice the average growth for the world economy as a whole. Inflation is running at just over 4 per cent a year. Although the article suggests that a US downturn will hit the Indian export sector, only 2.3 per cent of her exports go to the USA a contrast to China whose exports to the States are 7.3 per cent of her global export sales.
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