India’s GDP has grown at a rate of 8.8% this quarter compared to 8.6% last quarter. This is the highest quarterly growth rate in 2.5 years.
India may soon see rise in interest rate as economy starts to heat up again. Inflation has always been a cause of concern for long term prospects of the country. Indian economy has witnessed very high inflation and monetary policy can not be sais to be enough to put brakes on the spiralling prices.
Asia’s third largest economy is mostly a consumption driven economy which puts immense pressure on balance of trade due to high imports. But fortunately this domestic consumption kept India insulated from disastrous recession which west is still fighting and finding hard to come out.
While India prepares itself for monetary tightening, BOJ is still stuck with dilemma of ‘loosening or not’ the money circulating in its economy. America is still thinking of releasing more money into the system if things start getting worse from here on.
India’s $1.3 trillion economy may expand 8.5 percent in the year to March 31, the most in three years, the central bank said July 27. The benchmark wholesale-price inflation rate has hovered around or above 10 percent since January. The Reserve Bank of India said last week its priority is to rein in consumer prices.
Ten-year government bond yields fell 6 basis points to 7.93 percent at the 5 p.m. close in Mumbai after climbing last week to as much as 8.07 percent, near the highest level in four months, on concern central bank Governor Duvvuri Subbarao may raise rates for the fifth time since mid-March. The bank is scheduled to release its next policy statement on Sept. 16.
Salaries in India may grow an average 10.6 percent in 2010, the fastest pace in the Asia-Pacific, after increasing 6.6 percent in the previous year, according to the Lincolnshire, Illinois-based human resources adviser, Hewitt Associates Inc.
Indians’ increasing wealth is causing shortages in the automobile industry, with Volkswagen AG and Hyundai Motor Co. introducing waiting lists for the first time in more than a decade amid a lack of engine castings and batteries after local component suppliers failed to anticipate a surge of more than 30 percent in car sales in the country this year.
