Indian economy expected to recover

According to Finance Minister, Palaniappan Chidambaram, India’s economy is in a position to bounce back in 2009 with a predicted 9 percent growth, as measures have been taken to ensure that the factors causing the slowdown have been mitigated.

Analysts predict that interest rates will fall and that further duty cuts will be made so that consumer spending will increase domestically.

However opposition leaders are highly sceptical of the Chidambaram’ optimism indicating that talking up growth is simply a political ploy as Congress-led government is facing general elections by May 2009.

Percy Mistry, chairman of Oxford International Finance, has stated that this is simply not the reality and his organisation did not expect growth of this scale until the beginning of 2011.

In reply to this, Chidambaram has stated that the forecasts were tangible with a conservative figure of 7 percent for March 2009.

In order to sustain 9 percent growth, Jai Sinha, partner and co-head, India, at Booz & Co, a global management consulting firm, said that there is a reliance on the turnaround of the other major global economies also and with the fall in exports, it is likely that India is going to be partly dependent of the change in mood in the global economy.

India’s exports have fallen as the US, Europe and Japan fell into a recession in this third quarter.

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