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October 20, 2011

India Project between 7% and 8% GDP growth for 2011 and 2012 and IMF projects 5.25% GDP growth for sub-SaharanAfrica

1. WSJ - Indian Finance Minister Pranab Mukherjee said that India’s economic growth is likely to slow from 8.5% last year to between 7% and 8% over the next two years. In other words, all those GDP headlines are likely to include a 7, or 7 point something, not the 8 or 9 or even 10 of the government’s dreams. A few people had been thinking that India’s economic growth rate would outpace China’s. This will not happen for at least two years.

2. IMF - This year looks set to be another encouraging one for most sub-Saharan African economies. Reflecting mainly strong demand but also elevated commodity prices, the region's economy is set to expand by more than 5¼ percent in 2011. For 2012, the IMF staff's baseline projection is for growth to be higher at 5¾ percent, owing to one-off boosts to production in a number of countries.




There are, however, specters at the feast: the increase in global food and fuel prices, amplified by drought affecting parts of the region, has hit the budgets of the poor and sparked rising inflation, and hesitations in the global recovery threaten to weaken export and growth prospects. The projection for 2012 for the region is highly contingent on global economic growth being sustained at about 4 percent. A further slowing of growth in advanced economies, curtailing global demand, would generate significant headwinds for the region's ongoing expansion, with more globally integrated countries likely to be most affected.

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