Business Week: India's Economy Shows Surprising Growth
Spurred by an $80 billion stimulus package, the Indian economy grew by 7.9% in the third quarter as the nation's consumers displayed an appetite for spending.
India's $1.2 trillion economy may be among the world's first to come roaring out of the global recession, as government data showed it grew by 7.9% in the quarter ended on Sept. 30, the largest growth since the Indian government started releasing the figures in 1996. Industry grew 9.2%, compared with 5.1% in the year-earlier quarter. "These recent figures may well signal that the worst effects of the global financial crisis have passed for the economy," says Anuj Chande, head of the South Asia Group at Grant Thornton, which advises companies doing business in Asia.
The numbers, released on Nov. 30, have economists considering raising their estimates for full-year gross domestic product growth in India; the average estimate is currently about 6.5%. The government, meanwhile, has said it expects the Indian economy to grow by 7% to 8% by the end of the fiscal year in March 2010, and hit 9% the year after. "Our own 6.2% number for the current fiscal year is certainly looking on the low side," says Robert Prior-Wandesforde, Singapore-based Asia economist for HSBC (HBC).
It's an interesting turnaround by the Indian economy, which spent the period from October 2008 to March 2009 on government-sponsored life support—some $80 billion in tax cuts and other benefits in the form of a stimulus. Without the stimulus, growth in those two quarters would have been less than 1%; the stimulus pushed it to 5.8%. ...