Good,Bad and Ugly

The forecasts for the year 2009 given by three prominent economists of the country can be categorized as :

1.Good - Arvind Virmani, chief economic advisor of the government;
2.Bad- Raghuram Rajan, economic advisor to the prime minister;
3.Ugly- Rajiv Kumar, head of the Indian Council for Research on International Economic Relations (ICRIER).

According to Mr. Viramani the forecast is a strong 8.5% growth in the fiscal year 2009-10, this is based on the analysis done by him which says that Indian with a strong saving of 36% will allow it to substantially ward off the crisis. Normally the growth rate would be a quarter of the saving so it should be 9% theoretically but because of the global influences it is expected to be around 8% which is a very good number at the present situation we are in.He also says that as india is not a export oriented country the deficit will be less as we import many raw materials to produce the products to be exported so the exports and imports both will decline at same level.

According to Mr. Raghuram Rajan, the GDP growth for the year 2009-10 will be about 5-7%, this is a huge range and the probability of this coming true is also high. The higher level will be attained if the global economic situation improves and the lower range is when the situation worsens further. This is bad but not ugly.

According to Mr.Rajiv Kumar, the results of the ICRIER model that he developed which has given accurate predictions of the 2007 GDP growth of 9% and the first model to indicate the slow down has predicted a staggeringly low GDP growth of just 3.9 % for the fiscal year 2009-10. Ugly right. This models takes into account 10 leading indicators including GDP growth in the US and Europe, factoring in the global slowdown.

If a probabilty has to given to the above predictions :

1. good - 10%
2. bad - 60%
2. ugly - 30%

This a biased prediction as would want the economy to be good or bad not ugly at any circumstances.

Global GDP growh to be less than 1%

Scary thought to be in a period where in the global GDP grows at less than 1% this was told in the UN " world economic situation and prospects 2009" . With major economies that contribute to the consumption in recession. US, Japan and Europe contribute to about 70% of the world consumption with these economies in recession the impact will be global.

Nomura saying that the Indian GDP estimate for this year is only 6.7% saying that their will be a sharp decline in the growth rate in Q4 and expects the growth rate to be mere 5 % in the next year.

Scary thought if this forecast turns true then 15% of the Indian workforce will be unemployed and the salaries will fall by 60%.

The tips that will help one to land in a new job during the recession are : Six tips to help you land a new job.

Still the outlook for India is good from many organizations so their is some thing to smile. God is with us as he sent a smiley tonight for all of us. :-)

GLOBAL ECONOMIC OUTLOOK
COUNTRY DATA

Country	Item	2001	2002	2003	2004	2005	2006	2007	2008	2009
India	Annual growth rate of real GDP, (%)	4.5	4.5	7.3	7.1	11.5	7.3	9.1	7.6	7.2
India	Annual CPI inflation rate, (%)	3.7	4.4	3.8	4	4.3	5.8	6.4	6.2	5.7