Global and Indian GDP

The real Indian economy grew on par with expectations in Q2 at 4.5%. Consumption and exports have been a drag in the economy while the government approx 16% jump in spending helped a bit to pop up the economy. Government initiative in slashing corporate tax rates is a welcome move, while the continues lowering of the borrowing rate by the central bank will have a latent effect. Most of the multilateral banks have already lowered global GDP estimates for next year.

Look at the global economy. According to recent Bloomberg estimates, the US economic recession next year is at 26%, just 1% down from 27% in early September but still alarming. China is having its lowest growth in years while Germany just avoided a recession by growing at 0.1% in its third-quarter after negative growth in two quarters. Europe is going through a prolonged economic slowdown, and its much-debated quantitative easing result on economic growth is not the silver bullet. Japan grew 0.1%, slowest quarter growth in almost a year on the back of weak consumption and exports. As debt levels rise across economies, fiscal prudence is out for a toss.

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