“The central bank has admitted the economy has shifted into a slower gear, with the GDP growth target of 7.2 percent expected to be missed. Foreign exchange reserves are under pressure and depleting, while the rupee is weakening against the dollar. Core inflation will be to the order of 7.5 percent against a target of 6.5 percent. It will be impossible to meet the agricultural growth target of 4.8 percent because of the poor performance of rice and cotton crops and fears of reduction in wheat output.
The threat of renewed macroeconomic complications, after five years of good performance, would be heightened if prompt actions are not taken to correct the recent drift in fiscal indicators. Given the government’s limited capacity to fix the fiscal imbalances, we don’t yet know how painful the new period of economic downturn will prove, nor how long it might last.”
Full story: http://www.dawn.com/2008/01/08/ed.htm#1