Concerns about India's growth that were reflected in the sharp decline of the rupee (see this post) turned out to be quite justified. India's GDP is in free-fall - with growth well below the levels of 2008-09 global recession. One could argue that 5% is still respectable when it comes to GDP growth. Not for India.
|India's GDP growth|
Reuters: - India's economic growth slumped to its lowest level in nine years in the first three months of 2012, marking a dramatic slide in the fortunes of a country whose economy was boasting nearly double-digit growth before the global recession.
"Urgent and bold steps are immediately needed to prevent the economy from descending into a full blown crisis. This must be averted at all costs," said Rajiv Kumar, secretary-general of the Federation of Indian Chambers of Commerce and Industry.
The economy grew 5.3 percent in the last quarter from a year earlier, a sharp slowdown from 9.2 percent growth in the last quarter of the previous year, government data showed. Finance Minister Pranab Mukherjee blamed the poor performance of the manufacturing sector, which shrank 0.3 percent from a year earlier, for the slowdown.