Be prepared for slower growth. The government’s Central Statistics Office has released newly compiled figures that show the pace of India’s economic expansion could be falling. Its estimate for fourth quarter GDP growth is mere 7.8%. That’s partly because the revised base quarter growth is a high 9.4%.
More worrying for India’s economy is the fall in investment. CSO numbers show growth in investment through gross capital formation reduced to just 0.37% during the fourth quarter. That figure is the lowest India has seen in six quarters, and suggests the Reserve Bank’s multiple rate hikes are finally making an impact.
The good news, meanwhile, is that GDP growth for the full year is still at a respectable level. The figure for fiscal 2010-11 is 8.5%, in line with many of the more optimistic estimates.
In other news, Germany may want phase out its nuclear plants, but the country’s Chancellor, Angela Merkel, has made it clear she doesn’t expect India to give up atomic power. Speaking at a joint press conference in Delhi with Prime Minister Manmohan Singh, Merkel pledged support to India’s intentions to build a viable energy mix that includes nuclear plants.
Merkel also welcomed India’s decision to shortlist the Eurofighter Typhoon for its $10.4 billion contract to buy 126 combat aircraft. The Typhoon, which is jointly manufactured by Germany, Spain, Italy and Britain, is one of the two options India is considering for the mega deal.
And finally some news from markets. Reacting positively to global cues, the Sensex ended 271 points higher to close at 18,503. Nifty was also up by 87 points to close at 5,560.