Friday, January 25, 2008

Can Indian Economy sustain 9% growth

Comment on:

Dr. Manmohan's Singh's assurance that Indian economy can continue to grow at 9% (his status as an architect of modern Indian economy is unimpeachable) unaffected by the inevitable slow down of US economy doesn't seem realistic as the only other economy that has maintained that growth is China and that growth is based on that country's status as a major exporter to global markets, holding a net trade surplus with its trading partners.

India doesn't have the global market share that China does so it is vulnerable to (the drop in) BPO earnings, and its foreign exchange earnings are propelling infrastructure growth and consumer spending, so to ignore that is to live in a make believe world.

If the US economy slows down, and the dollar falls to the Rs. 32 range, Indian economy will slow down.

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