Thursday, 7 June 2012

[HM:253664] The Indian Economy Is A Wreck.



The Indian Economy Is A Wreck: These  Charts Show What's Going Wrong


India's economy grew just 5.3 percent the past quarter, the rupee is taking a beating, and inflation is still high, leaving the central bank with little room to maneuver.

We've written about India's fiscal problems, but what's behind the slowdown?

Drawing on a report by HDFC Securities' analysts Sameer Narang and Vishal Modi we pulled together 8 charts to show the deceleration in the Indian economy.

India's GDP grew 5.3 percent in the fourth quarter falling to a seven-year low

And the slowdown has been sharp in the last four quarters, with GDP slowing from 8 percent in June 2011 to 5.3 percent the last quarter

HDFC has revised down their 2012 growth rate for India to 6.5 percent driven by lower growth in industrial output and the service sector

Agriculture which accounts for about 16 percent of GDP has also slowed down

Services slowed to 7.9 percent in the fourth quarter led by slowdown in trade, hotels, transport and communication sub‐sector

Given high interest rates and weak external and internal demand industrial production is expected to stay soft

Manufacturing plunged to 2.5 year-over-year (YoY) growth in FY12, down from 7.6 percent the previous year. It is projected to grow 3 percent in FY13

Investment rate for 4QFY12 improved to 31.4 percent of GDP from a low of 27.8 percent of GDP in 3QFY12

GFCF or gross fixed capital formation is a component of the expenditure on GDP and shows how much of the new value added in the economy is invested (rather than consumed).




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