Strong GDP

The GDP (Gross Domestic Product) growth for financial year 2008 has been revised to 9% from 8.7% earlier. but I am more concerned about sectors exposed to interest rates and capital flows because of high inflation and good GDP growth. Getting 8.8% GDP growth is no doubt good to Indian growth but we should remember that it will come down just a little bit, probably during the second half of this year due to oil and other commodities.

RBI has a good tool

With such a good GDP number it gives RBI considerable room to stretch their arms and raise the interest rates a bit and moderate the inflation. India which was considered one of the investment destination in December 2007 is not considered as such now and so this GDP numbers certainly seem to add more credibility to India’s story, which is great news and that would lead to strong capital inflows.

Oil still a concern

Now its not all glowing picture for India because if you are growing at such a high pace then the demand for oil is extremely strong and that could led to a more slowdown story then we can think off. I don’t see in any way global economy can keep growing at the rate it is if oil keeps shooting up. Something has got to give and I think it is going to be the global economy that will slow down along with countries like India that are dependent on oil prices.