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HSBC India expects GDP to grow by 8 pc in FY 11

Last Updated: Monday, October 12, 2009 - 21:04

Mumbai: HSBC India has forecast the
country`s GDP to grow by 8 per cent next year against the
estimated GDP growth of 6.5 per cent in the current year, a
top bank official said here.

"India`s GDP growth rate is about 6.5 per cent this year
and our forecast is that the GDP would grow by 8 per cent in
FY 11," HSBC India`s CEO, Stuart Arthur Davis, told reporters
here today.

India is an important player in emerging markets and
HSBC expects India to grow strongly in the next few years,
Davis said.

"We continue to see Foreign Direct Investment (FDI)
inflows to emerging markets remain higher than developed
markets and the FDI inflow for India as of July this year was
over USD 10-billion," Davis said.

Quoting the newly launched HSBC Emerging Markets Index,
Davis said that emerging markets were set to lead the global
economic recovery.

The index, compiled with data from nearly 5,000
purchasing managers of different companies in 13 countries, is
the largest survey of economic data of emerging markets and a
powerful indicator of the economic and business health of the
world`s emerging markets.

The new index shows that the output of emerging markets
in Q3 recorded a robust rise and that forward indicators point
to further improvement in Q4, it said.

The index is a composite indicator weighted by GDP and
drawn from national purchasing managers` index surveys in
countries like the Czech Republic, Israel, Mexico, Poland,
Singapore, South Africa, South Korea, Taiwan, Turkey and the
BRIC countries of Brazil, Russia, India and China, the bank

The HSBC EMI surged from 50.7 in Q2 to 55.3 in Q3,
signalling the strongest quarterly increase in emerging market
manufacturing and service output since Q2 of last year.

Any reading below 50 indicates a contraction of output
during the quarter while readings above 50 signal expansion.

"We now expect emerging nations to see economic growth
of 6 per cent next year while the developed world will expand
by only 1.8 per cent," Davis said, adding that the
manufacturing and services sectors in emerging markets
recovered more quickly than the developed world after the
recent economic crisis.

Meanwhile, HSBC plans to open 3 branches in India by the
end of December, taking the total number of branches to 50.

Commenting on HSBC`s expansion plans in India, Davis
said, "we are looking to grow strongly in the next 12-18-
months in India. The three branches will open in Nashik,
Guwahati and Surat."

The bank also wanted to grow its local mortgage book,
which had been flat. HSBC India also expects to see strong
growth in the bank`s corporate and mortgage loans over the
next year-and-a-half, Davis said.

Bureau Report

First Published: Monday, October 12, 2009 - 21:04
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