India Economic Outlook
December 13, 2019
Economic growth slowed to a six-and-a-half-year low in Q2 FY 2019, which ran from July to September, as fixed investment grew at the weakest pace in nearly five years. Despite recent interest rate cuts by the Reserve Bank of India (RBI), a sharp moderation in bank lending growth weighed on fixed investment. On the other hand, private consumption and government consumption both grew at a faster pace in Q2. Turning to Q3, economic growth should modestly accelerate. Bank lending growth picked up in October for the first time in three months, suggesting recent interest rate cuts might be feeding into lending. However, consumer confidence and business confidence in the manufacturing sector both decreased in the quarter, pointing to modest private consumption and fixed investment readings. Moreover, the private-sector PMI averaged lower in the October–November period than in Q2.India Economic Growth
Looking ahead, the economy should pick up steam in FY 2020, which starts in April 2020, due to accommodative fiscal and monetary policy. However, high levels of bad debt in the banking sector could impede lending and restrain consumption growth, while tense relations with Pakistan and global trade protectionism are downside risks. Our panelists expect GDP growth of 5.7% in FY 2019 and 6.4% in FY 2020, which is down 0.3 percentage points from last month’s forecast.India Economy Data
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India Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 6.50 | -0.04 % | Jan 01 |
| Exchange Rate | 71.23 | -0.09 % | Jan 01 |
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India Economic News
India: Exports and imports both decrease in December
January 15, 2020
Merchandise exports decreased 1.8% in December from the same month a year earlier, after dropping 0.3% in November, amounting to a total value of USD 27.4 billion.
India: Consumer price inflation jumps in December
January 14, 2020
Consumer prices rose 1.21% in December compared to the previous month, up from 0.95% in November.
India: Industrial production rebounds in November
January 10, 2020
Industrial production increased 1.8% in November compared to the same month a year earlier, contrasting the 4.0% decrease in October. Output in the mining and manufacturing sectors both jumped in November compared to the same month a year earlier, contributing to the month’s improved reading.
India: Private sector expands at fastest pace in five months in December
January 6, 2020
The composite Purchasing Managers’ Index (PMI) produced by IHS Markit increased to 53.7 in December, up from 52.7 in November and representing the highest reading in five months.
India: Reserve Bank of India unexpectedly holds rates in December
December 5, 2019
The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) unanimously decided to leave all monetary policy rates unchanged at its meeting that ended on 5 December, surprising many market analysts who expected a rate cut.
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