India

RGE's Q1 2010 India Outlook

India's growth rebounded in Q3 2009 as policy measures revived consumer spending and industrial activity while capital inflows restarted investment and the asset market rally. Below average rainfall, however, will reduce agricultural output during Q4 2009 and Q1 2010 and weigh on growth. India will grow at an estimated 6.7% in 2009 as policy measures sustain infrastructure investment and rural and urban consumption. Concerns about the fiscal deficit and inflation will make policies restrictive in 2010. But this will be somewhat offset by the pickup in private demand and continued capital inflows. RGE forecasts India to grow at 7.7% in 2010, close to its potential growth rate (7.5%-7.75%). India was cushioned from the global crisis due to a domestic consumption-to-GDP ratio of 65% and a relatively closed financial system. Large domestic savings and investment, government spending on social services and increasing liberalization will help India grow…

Read the Q1 2010 India Outlook.