With economic growth forecasted to slow, future incomes are expected to fall. If other things remain the same, how will the demand or supply of loanable funds in India change?

At the start of 2008, India had an annual growth of 9 percent, huge consumer demand, and increasing investment. But by July 2008, India had large government deficits and rising interest rates. Economic growth is expected to fall to 7 percent by the end of 2008. A Goldman Sachs report suggests that India needs to lower the government’s deficit and raise educational achievement.