China and India are amongst the fastest-growing economies in the world; however, the recession reached their economy, as well. In their case the expected figures for the growth of GDP decreased greatly. Economists say that interest rates should be cut and the demand for export will be likely to decrease in the future. Even the primary sector, agriculture, will face a fall in its growth.
But what exactly do the figures tell us? Well, the country’s stock exchange index, the so-called Sensex fell back by 2%. The Gross Domestic Product growth was almost 10% lower than that of the last year. Although predictions were made that the economy would see a 7% expansion, analysts and economists say that a modified analysis should be made considering the current circumstances.
The main problem is that India’s economy is largely driven by domestic demand. As the demand is problematic and it is decreasing everywhere, it can only worsen the situation for India, too. Just because the governments try to create some stimulus towards the demand, it does not necessarily mean that it is going to be the solution to the problem. The chief economist of the Mumbai Bank of Baroda, Rupa Rege Nitsure, told BBC that the plans the governments had in mind had not restored the business confidence so far. More effective decisions must be made to see some progress.
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