Wednesday, November 09, 2011

Moody's downgrades Indian Banks

The Indian economy is possibly shrinking. Real growth is claimed at 7.7% and inflation is fudged at ~10%, but is likely to be closer to 20%, therefore real growth may be actually around (-)2.3%.

That's why the vultures are swooping in.

2 comments:

nizhal yoddha said...

non carborundum, the growth rates are inflation-adjusted. but of course india is rapidly heading towards the nehruvian rate of growth of 2-3%, that which the UPA is comfortable with.

and inflation is not 10%, it is closer to 20% in reality.

Non Carborundum said...

Rajeev

Real growth rate is negative by that very logic. Since nominal GDP growth rate is ~17%. If you subtract Govt. figures for inflation then real growth works out to ~7% and if you subtract the actual inflation of 20%, real growth works out to about negative 3%.

Of course, a finer point is that 20% inflation approaches hyperinflation, so the working for real GDP changes slightly.

Question to fellow corporate stooges working in India : Did the topline of your company grow by 17% or more last year?

No? Then how do you figure Indian GDP grew nominally at ~17%. More fudging?