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Indian economy in sharp slowdown | Indian economy in sharp slowdown |
(about 2 hours later) | |
India's economy grew by less than expected in the last three months of 2008, official figures have shown. | India's economy grew by less than expected in the last three months of 2008, official figures have shown. |
The country's gross domestic product (GDP) grew by 5.3%, compared with 7.6% in the previous three months and 8.9% in the same period a year earlier. | |
Agriculture, which makes up about a fifth of the economy was one of the sectors to see growth fall. | Agriculture, which makes up about a fifth of the economy was one of the sectors to see growth fall. |
The global recession has cut demand for exports, and economists are calling for further measures to boost growth. | The global recession has cut demand for exports, and economists are calling for further measures to boost growth. |
These have included a clamour for further interest rate cuts. | These have included a clamour for further interest rate cuts. |
The data saw India's main stock exchange index, the Sensex fall by 2% on Friday. | The data saw India's main stock exchange index, the Sensex fall by 2% on Friday. |
Domestic demand | Domestic demand |
Observers say the data will come as a blow to the Congress-led government, which faces general elections by May. | Observers say the data will come as a blow to the Congress-led government, which faces general elections by May. |
It has predicted that the economy, which grew by 9% overall to March 2008, will expand by 7.1% in the 12 months to March this year. | It has predicted that the economy, which grew by 9% overall to March 2008, will expand by 7.1% in the 12 months to March this year. |
However analysts say this will probably be revised down. | However analysts say this will probably be revised down. |
The sharp slowdown in both China and India, which have been among the world's fastest-growing economies, will have a significant impact on the world economy, with the major industrial countries already mired in recession. | |
India's economy is Asia's third-largest, and is largely driven by domestic demand. It has seen strong growth of 9% or more in the past three years. | India's economy is Asia's third-largest, and is largely driven by domestic demand. It has seen strong growth of 9% or more in the past three years. |
But the slowdown has "dismissed speculation India is more resilient in this global turmoil because its economy is more domestically oriented," said Sherman Chan, an economist at Moody's Economy.com. | |
Meanwhile Rupa Rege Nitsure, chief economist are Bank of Baroda in Mumbai said the growth figure was "way below my pessimistic expectations". | |
"Whatever the government is doing is not going to be very effective as large scale demand stimulus across the world has not proved to be effective in restoring business confidence." |