India joined the trillion dollar economy club this week. This is due to the strong value of rupee compared to Dollar.
The other countries in this trillion dollar club are US, Japan, Germany, China, U.K,
France, Italy, Spain, Canada, Brazil and Russia.
Some experts believe that India will not sustain this position for long. India’s Economy is in danger of overheating.
The Bombay Stock Exchange, with a capitalization of $944 billion, is also inching toward the magic $1 trillion mark.
Given the stresses on the economy, Credit Suisse report cautioned that India was unlikely to sustain the new level. “We would claim, given our outlook, that whatever the capitalization is today, it is likely to go down again in the near future before it sustainably stands above this mark,” it said.
“Such trends are neither transitory nor coincidental, nor are they independent from one another. Rather, they are the result of a structural shortfall in the absorptive capacity of India’s economy,” said Kristin Lindow, vice president at New York-based Moody’s.
“The U.K. is the only economy to stop being a trillion-dollar economy for a while after attaining the status the first time,” the report said.
Credit Suisse said that for 10 economies that crossed the $1 trillion mark in GDP, stock markets rose the year afterward in eight.
[Posted under: Indian economy, Trillion dollar economy club]