India is predicted to register GDP growth of about 7.5% this financial year, a drop from 9% that the country achieved last year. In contrast, however, global economic growth is projected to have shrunk to 3.7% in 2008 from about 5% the previous year, according to estimates of the International Monetary Fund. An earlier study by the Economic Intelligence Unit suggested India will contribute more than 12% toward global economic growth by 2020 from approximately 5% in 2006.
This is also a reflection of the ‘Decoupling Theory’ for the emerging markets, particularly in Asia, which are less dependent on developed markets. Growth deceleration was much less marked in emerging markets in the first half of 2008 than in developed markets, according to Morgan Stanley, the U.S. based global financial services firm. It forecast developed market growth to slow to 1% in 2009 from 2.5% in 2007 while emerging markets to slow to 6.6% from 7.8% for the same period.
Foreign companies invested more than $12 billion in acquiring Indian companies in 2008, slightly less than the $15 billion a year earlier. Indian companies reciprocated by investing a near similar amount in acquiring companies overseas. See Mega Deals ‘Top 20’ Deals of the year 2008.
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