The International Monetary Fund said thatIndia growth may have a decade-low after the decrease of the investment. The Washington-based lender said in its World Economic Outlook report that the GDP of India will rise 4.9 percent in 2012, less than a July forecast of 6.1 percent.

“The outlook for India is unusually uncertain,” the IMF said and they won’t change the monetary policy until a sustained decrease in inflation materializes. India’s government began to expand the fiscal deficit to “permit more investment from abroad triggered a surge in the rupee and buoyed stocks” (Kartik Goyal).

Inflation is always a serious problem for countries. Inflation can directly “cause an increase in the poverty incidence of a country and indirectly cause higher unemployment rates” (sowwireguy1). Governments try to solve the problem by their intervention, such as “resort to various acts” and “lift certain import controls” (sowwireguy1). Actually, the government plays a significant role in the fight against inflation. So, sometimes compared with just let the market heals itself, allow the government intervention may be a better option.

Works Cited:

-Goyal Kartik, Bloomberg, Oct 8, 2012,

http://www.bloomberg.com/news/2012-10-08/india-growth-to-drop-to-decade-low-amid-high-inflation-imf-says.html

-Sowwireguy1, Hubpages,N.D,

http://sowwireguy1.hubpages.com/hub/How-To-Solve-Inflation

 

Because of the global financial crisis in 2008 – 2009,China’s economy began to slowdown. The RGDP of China fell from 11.4% in 2007 to approximately 8% this year. The World Bank forecastsChina’s economy to grow by 7.7% this year, down from its projection of 8.2% in May. The main reason that it gives is that “China’s exports have been hurt by economic problems in the eurozone and theUS, two of its biggest markets” (News Business).

Another reason for why the World Bank lowers china forecast is that Chinese government has done a lot of stimulus policies to keep the growth stable. The measures helped the economy sustain growth, but it also brings other effects. There is a sharp increase in property prices in the country and people fear about asset bubbles being formed. Government tries to use other measures to help to keep property prices in check, but theChina’s growth may be hurt again.

The World Bank added that “the role of investment inChina’s growth had also reduced over the past year” (News Business).

The bank not only lowers it’s the forecast about china, but also lower the wake of a slowdown in exports from the region in theEast Asia.

Economic measures always have two sides of the economy, such asChina’s measures. The measures that china used to help rising the growth of the economy were worked, but they also brought inflation to the country. It helps in one side but also brings impact to another side. Keep thinking comprehensive and choose the best choice is always important.

The orginal resourse: BBC NEWS,  http://www.bbc.co.uk/news/business-19867402