Prime Minister Manmohan Singh said on Sunday that he expects the world economy to partially recover by September and that India can then hope to go back to the growth rate of 8-9% which it averaged in recent years.
The question is, when will India have a chance to return to the old growth trajectory? Too many investors and analysts seem to believe that this will happen very soon, and are hence hoping for a sharp rebound in growth very soon.
The professional forecasters surveyed periodically by the Reserve Bank of India seem to be more circumspect. Their latest median estimates have been released by the central bank along with the usual economic review it puts out on the eve of its monetary policy.
These forecasters are expecting a mild recovery from the third quarter (Q3) of the current fiscal year. They say economic growth will be at 6.2% in Q3, after four successive quarters of sub-6% growth. Fourth quarter growth: 6.5%.
That’s good news. But moving from there to 8-9% growth could be an arduous task.