India’s economic growth finally bottoming out? – ANZ

In the view of analysts at Australia and New Zealand Banking Group (ANZ), India’s recovery in economic growth is unlikely to have legs despite improvements in some of the indicators.

Key Quotes:

“Improved readings of some coincident indicators suggest that India’s economic growth is finally bottoming out. A further recovery in household consumption is likely, considering that higher agriculture prices should strengthen rural purchasing power.

At the same time, these improvements are insufficient to catapult GDP growth to its trend level of 7%, at least over the next 12-18 months.

The economy is still plagued by a multitude of problems, including financial sector stresses, excess capacity and weak monetary policy transmission.

Moreover, at least for now, the combination of weakening public finances and higher inflation is compromising much needed policy flexibility.”