Unit 2 Macro: india’s Faltering Economy

India is Asia's third largest economy but it is experiencing an economic slowdown with the rate of economic growth dipping to the lowest level in more than a decade.

The economy is suffering from a persistent trade deficit (worsened by a fall in exports), together with high rates of inflation and a sharply depreciating currency (the rupee). Billions of dollars of currency have been taken out of the economy by worried investors - this is known as capital flight.

Consumer demand for goods and services is being hit by rising prices as the cost of imports surges and other prices head higher too. Onion prices for example have more than trebled.

This BBC news video looks at the weakening of economic growth in India. Can India put in place economic reforms and policies to return the economy to the growth rate needed to sustain the improvement in living standards that has occurred since the early 1990s?

Onion prices cause tears for millions of Indians