There is bewilderment in New Delhi over the results for the last quarter of 2011. India's economy weakened to its lowest level in over two years, recording 6,1% GDP growth in the last three months of last year, lower than the expected 6,3%. Also down from the third quarter, when the economy had grown by 6,9%, the weakest performance since the second quarter of 2009. Overall, the estimates for the full year have been revised downwards to 6,9 %, a rather discouraging figure if we consider that Prime Minister Manmohan Singh expected growth of 9% in April.
The decline in economic data is mainly due to slowdown of the global economy, but also to the numerous increases in interest rates made by the Central Bank to try to curb the galloping inflation. The consumer price index reached 10% a few weeks ago and the Reserve Bank of India has raised interest rates 2010 times since March 13. Currently the reference bank rate is 9,5%.
Growth in 2011 of less than 7%, while it may seem high compared to a European economy in crisis, is actually not enough for a country which, with over 1,2 billion people, over 35% of whom live under the minimum poverty line, wants to aim for sustainable development and to defeat poverty.
