Western With Consumers Tightening Their Belts - 1 Sep 08

With Western consumers tightening their belts, companies still in budget-cutting mode and inflation raging, the Indian economy was bound to slow from its spectacular pace of recent times. New Delhi''s Central Statistical Office revealed Friday that India''s economic growth slowed to 7.9% annually in the April-June quarter, down from 9.2% in the second quarter last year and easing off from the previous quarter''s 8.8%. This is the first time India has recorded GDP growth lower than 8% in nine quarters, since December 2004. A downturn in the manufacturing sector braked the Indian economy. According to the government figures published Aug 29, manufacturing growth was hit the hardest, dropping to 5.6%, from 10.9% last year.

Besides manufacturers, Indian information technology companies, whose success in recent years has been grounded on India''s large population of low-wage but well-educated, English-speaking technicians, are also under threat as international banks, brokerages and other firms all started to cut their IT budgets amid the global credit crunch.