India: Growth boom being written

Friday, October 10, 2008

The higher interest rates and CRR have finally taken their toll in reported economic statistics.  Growth numbers now being reported are proving once again that the stock market is an accurate gauge of forward looking economic growth.

The statistics reported today are:
  i) India's mining grew 4% in August vs 14.7% year ago
 ii) India's Aug Industrial production rises 1.3% from year ago
iii) India's production at 6 key industries grew 2.3% in August
iv) India's manufacturing grew 1.1% in August VS 10.7% year ago

Combined with the turmoil in markets world-wide and heart-stopping size losses the forecast for our markets is crystal clear.  Down!

Our interest rates will have to fall 3 to 4% and financial sector consolidation will have to be accelerated.  We must protect our ability to create world-class infrastructure, else we will not be in position to take full advantage of the investment boom that will come post this traumatic time.  Government must take the lead in accelerating infrastructure is the time to increase wide expertise will not be available this cheaply again.  Take full advantage and be prepared for the boom.

And it will assured...the investment boom is already being written with the ashes of this bust.

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