Friday, August 31, 2012

Languishing GDP growth!

It is no surprise to learn that in the quarter ending June, the GDP growth of India got weaker, exhibiting its lowest in three years, at 5.5 percent. With this exposure, there seems to be no respite for Prime Minister Manmohan Singh. The economic agenda that he created is no wonder paralyzed owing to a series of political scandals. And the coal scandal exposed by CAG has added fuel to the fire. As he is trying to escape those scandals, the GDP report for June Qtr acted as an eye-opener, hitting him worse!

Exports have been hit due to weak demand in the West. But such fluctuations do occur. It is lack of government reforms and overspending that has affected greatly the GDP growth. Investors hoped that the weak GDP growth would influence the RBI to lower interest rates at its next policy meeting to be held on September 17. But again the stubbornly high inflation has come on the way!

After the GDP data report, sensex recovered to about 80 points from it's lowest point of the day and Nifty too improved by 25 points from it's lowest point. However, due to fall in ICICI bank shares, sensex fell by 0.92% and nifty fell by 1.1%.

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