Slower-than-expected growth boosts rate cut calls

31 Aug 2015 | Author: | No comments yet »

India’s economy grows slower than estimated.

New Delhi • India’s GDP grew slower than estimated, boosting pressure on Prime Minister Narendra Modi to make more progress in overhauling Asia’s third-largest economy. Gross domestic product rose 7 percent April-June from a year earlier, after a 7.5 percent expansion the previous quarter, the Central Statistics Office said in a statement in New Delhi on Monday. India’s currency and stocks plummeted last week along with other emerging markets on concerns that China’s slowdown would be worse than anticipated as the Federal Reserve prepares to raise interest rates.

This week he stepped back from land reforms after opposition from farmers, and proposals to overhaul labor laws and implement a national goods-and-services sales tax face delays. “What is needed is to get the GST implemented as land reforms are tougher now,” Vishnu Varathan, a Singapore-based economist at Mizuho Bank said before the data, referring to the Goods and Services Tax. Since the nation exports little to China while benefiting immensely from lower commodity prices, India will be less impacted than other countries from developments in China, central bank Governor Raghuram Rajan said in an interview at Jackson Hole in the United States on Saturday. The Reserve Bank of India retained its growth forecast for gross value added — a component of GDP it closely watches — at 7.6 percent for the year through March 2016. Asia’s third-biggest economy will expand 7.5 percent in the current year, compared with China’s 6.8 percent, an average 4.2 percent for emerging markets and 3.3 percent for advanced nations, the International Monetary Fund forecast in July.

India overtook China as the world’s fastest growing major economy in the January-March quarter, expanding 7.5 percent compared with its larger rival’s 7 percent increase.

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