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Decline in Stock mkt and Real Estate Necessary- SBI Chairman
Decline in the stock market and real estate prices is a timely correction as it was unsustainable for long, State Bank of India Chairman O P Bhatt has said. “The high real estate prices and the skyrocketing sensex were not sustainable for a long period and the moderation was a timely correction, both economically and socially,” he said. The Bombay Stock Exchange benchmark index, after touching a high of 22,000 points in January, had gone down even below 8,000. At the same time, property prices which were rising at astronomical pace have started moderating following the credit crunch.
Demand for housing loan has seen a dip leading to correction in the real estate prices across the country. Speaking about the Indian economy, Bhatt said it is showing signs of moderation, however, it is growing faster than the developed economies in the world. With a GDP growth rate of six to seven per cent, Indian economy was growing much higher than that of the economically developed nations including the UK, the US, Australia and Japan, which were bogged down by the global financial meltdown, he said at a function organised by ‘Banker’s Club’ here last night.Exuding confidence, he said India was a well powered economy. “I don’t see anything that can weaken it. There is a problem temporarily, but it is not going to last forever,” he said. Bhatt said people might not buy cars as frequently as they did earlier, since perceptions have changed, but they will invest in safer places.
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