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Banking

Indian government slashes economic growth forecast

India officially pares down its economic growth forecast which is more in line with consensus


India's goverment has finally revised its economic growth forecast at a more conservatives 7/25% - 7.5% from 9% back in February this year:




India

- Nov WPI inflation at 9.11% y/y vs. expected 9.02% (Oct 9.73% y/y)
- Govt cuts growth forecast, warns on trade balance, deficit

- Trade deficit seen widening to $155-$160 bln in FY12
- Fiscal deficit target of 4.6% of GDP will be hard to achieve, may
be up to 1.0% higher
- Government slashes economic growth forecast to 7.25%-7.50% from
February estimate of 9.0% y/y
- Global uncertainty to hit tax collections

Source: Monument Securities



While the number is still see as more in line with market consensus, it is perhaps still a little more optimistic than some estimates of 6.9% and 7.0%

Yesterday, Euromoney Skew too a look at how despite emerging markets being heralded as the place for sustainable growth and a flight to safety, reports and statistics reveal that India isn’t the golden goose that keeps on giving.


However, while trade deficit widening looks worrying, in the longer term, Citi economists still say that:




Citi’s Global Perspectives & Solutions called ‘Trade transformed':

The emerging new corridors of trade power’, world trade will rise from $37 trillion in 2010 to $122 trillion in 2030 and to $287 trillion in 2050. Asia could overtake western Europe as the world’s largest trading region by 2015, while China will overtake the US in 2015 and India overtake the US and Germany in trade by 2050



- Euromoney Skew Blog



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