SECOND QUARTER GDP AT 7.9%

India’s economy grew at its fastest rate in 18 months in the quarter through September, smashing expectations and adding pressure to bring forward an interest rate rise and cut stimulus spending as inflation mounts.

Asia’s third-largest economy grew 7.9% in the past quarter from a year earlier, far above forecasts of 6.3%, but growth was expected to slow this quarter when the impact of a weak monsoon would be seen on crops.

The expansion was driven by government spending, manufacturing, services, and a better-than-forecast farming output, sending bond yields and swap rates higher as investors bet on a rise in rates and the finance minister said growth could hit 7% in the fiscal year ending in March 2010.

“This data could be a green light for the Reserve Bank of India to hike rates, and there are greater chances of this by end of the calendar year,” said Robert Prior-Wandesforde, senior Asia economist at HSBC in Singapore.

“The exit from the fiscal stimulus by the government may also be earlier post the GDP data.”
Prior to the data, most economists had predicted a rate rise sometime between January and April 2010.

In the June quarter, India’s economy grew 6.1% from a year earlier, and Prior-Wandesforde said that by his calculation the last quarter’s growth was the sharpest on a quarter-by-quarter basis since quarterly data began in 1996.

Manufacturing output grew 9.2% in the quarter as consumers bought more cars and other goods.

Larger neighbour China, which along with India is helping to pull the global economy out of its worst recession in decades, clocked growth of 8.9% during the same quarter.

MINT

Economy to grow at close to 9% this fiscal

Finance minister P Chidambaram on Monday said that Indian Economy would grow close to 9% in 2007-08. “I am not changing my projections, the growth rate in 2007-08 will be close to 9%,”he told reporters after inaugurating the 1500th branch of Indian Bank. He added that the average growth rate in the last four years has been 8.6%. For 2008-09, too the Chidambaram is setting a target of 9%. “With more investments taking place, we can aim to grow at 9% in 2008-09,”he said, adding that this would require “hard work.”The government also needs to deliver while outlays have to be translated into outcome.

The Financial Express

http://www.financialexpress.com/news/

Economy-to-grow-at-close-to-9-this-fiscal-reiterates-FM/256215/

Markets to scale new peaks in '08

The Dalal Street is expected to start the New Year on a positive note and scale new peaks in the next 12 months, despite situations in global Markets remaining uncertain, analysts say. They predict 2008 would be a promising and bullish sentiments will prevail throughout the year along with some corrections due to local and global cues.

The Financial Express
http://www.financialexpress.com/news/
Markets-to-scale-new-peaks-in-08-Analysts/255794/