The BSE sensitive index (Sensex) touched an all-time high of 21,207 on 10th January 2008 and our FM Mr. P. Chidambaram said that the outlook was very positive for India and her GDP is all set to grow at 9% this year. The analysts were having a ball and predicted that Sensex would scale 25,000 in no time. The Governor of Reserve Bank of India (RBI), Dr. Y.V. Reddy, it was reported, was considering a cut in the interest rate to boost investment. The stock analysts were rejoicing about the decoupling theory: How the stock markets in rapidly-growing economies like India and China would be unaffected by the imminent slowdown in the U.S. India was living a dream.
The dream was short-lived and much to all’s astonishment, the Indian markets crashed. The first quarter of the calendar year 2008 was the worst since 1992. Market indices have tumbled 28% in dollar terms and some stocks have lost more than 50% of their values.
Now opinions differ widely on GDP growth in 2008-09. The Delhi-based Oxus Research & Investments is the most optimistic and maintains that 9% is still achievable. Deutsche Bank pegs it at 8.4% while UBS does it at 8.2%. In the middle ground are the Asian Development Bank (8.0%), the International Monetary Fund (7.9%, for calendar 2008) and Lehman Brothers (7.6%). HSBC, JP Morgan Chase and Morgan Stanley are among the least optimistic and estimate a growth of 7%. Meanwhile, rating agency CRISIL has made a downward revision of its estimate to 8.1% from an earlier forecast of 8.5%.
Avik Mukherjee
Globsyn Business School
1 comment:
This year GDP will be near by 8%.Due to increase in crude oil,inflation & olympics many goods have been affected.
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