Indian Economy in 2012 What to Expect!




Sunday, March 11, 2012

Among the world’s top economies, Indian Economy has stood its ground against all odds for the past few years. The trend is expected to remain the same in 2012 with an estimated economic growth that exceeds 7%. However, the estimated economic growth rate is at risk due to a number of pressing factors.

  • Spiraling inflation: The State Bank of India has recently stated that the country’s lending rates will be high due to the anticipated spiraling inflation. The recent speeches from The SBI chairman have clearly shown that the country will suffer some economic hiccups due to the high inflation rates.
  • A devalued rupee: due to high inflation, the government had to take some drastic measures late last year, such as devaluing the Indian currency. This measure was short lived. However, the damage has already been done. The country’s importation sector was seriously affected and in the process affecting the exporting countries. The country is struggling so much to recover from this unfortunate economic setback.
  • Delays in critical reforms: Indian government has faced some serious backslides due to unsuccessful reforms. The political icons of the country have not been able to fully carry out all critical reforms that will guarantee the Indian Economy success. The president and his cabinet have offered all sorts of explanations, but the bottom line is that Indian Economy will develop to the estimated rates once the reforms have been achieved.

Despite all the above challenges, the economy of India is expected to stabilize soon. Nevertheless, Indians and all its prospective investors have a reason to smile. The Indian Economic Summit 2012 has stated that it will outline a layout for a new India. A country that will be composed of new strategies of: realistic, practical and effective leadership and governance. Therefore, it is no longer a myth, reforms are coming to India.

The State Bank of India

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