India’s GDP up 7.9% on year despite global meltdown

Monday, November 30, 2009 | Posted by: Grant Thornton
| Tags: India, finance, economy, Anuj Chande, GDP, South Asia, Indian Economy

Anuj Chande, Partner and Head of South Asia Group, comments on the announcement from the Indian government on second quarter GDP data (July to September) showing 7.9% growth on the previous year.

Please note these figures are available at: http://www.mospi.gov.in/mospi_press_releases.htm

“Gross domestic product grew 7.9% from a year earlier after rising 6.1% in the previous quarter.  The Indian economy is showing clear signs of recovery as the pace of economic growth gains momentum.  The manufacturing industry performed particularly well in the second quarter growing 9.2 percent compared with 5.1 percent from last year’s quarter.

These recent figures may well signal that the worst effects of the global financial crisis may have passed for the economy.  India is less exposed to the global slowdown than US and Europe because a smaller proportion of its GDP is generated by exports.  The service sector accounts for more than 50% of GDP*, whereas exports as a percentage of GDP is significantly smaller at 18%.

It is a consumption-based economy, which makes it much more resilient even if the global economy falters.  Around a quarter of the world’s under-25s live in India. Much of the thriving service sector has been built on this young, English-speaking population.

The Indian economy is continuing to present long term investment opportunities to the domestic and global economy and has continued to make investments and create jobs in the domestic market throughout the economic slowdown.

India is expected to be the fastest-growing economy in 2010, with 8%** year-on-year GDP growth. If this steady growth can be maintained, India would be on course to become the world’s second largest economy after China within 30 years.  The next few years are going to be one of the most exciting for the Indian economy, particularly the domestic economy.  With a strong focus on fiscal consolidation, infrastructure and bringing about reforms in the education sector.”

ENDS

Notes to editors:

* McKinsey consumer report on India, May 2007
** The World Bank’s new Global Development Finance Report, 2009

For further information, please contact:

Anuj Chande, Head of South Asia Group at Grant Thornton, 07831 323 657

Marielle Legair, Grant Thornton press office, 020 7728 2183