Economic indicators in India are showing re-acceleration after a slowdown post festive season in October 2022, Morgan Stanley said in its report.
After getting slowed down in a fairly broad-based manner post the festive season in October which raised investors concern, the Indian economic indicators have once again started showing resigns of re-acceleration in early 2023, the report says.
“Government policies are still very much geared towards reviving private investment, which we expect will continue to unfold as strong trailing demand has already lifted capacity utilisation,” the report notes.
The report further says that government’s budget for FY24 was another step in the right direction to crowd in private investment.
According to a Bloomberg report, India’s economic expansion likely slowed in the October-December period due to rising borrowing costs that curtailed consumption which is a key growth factor.
Meanwhile, economists are projecting growth of 6.9 per cent from April 2022-March 2023 which is below the government’s estimate of 7 per cent but a little higher than the IMF’s 6.8 projection.
“There are signs that higher interest rates are feeding through to the real economy,” said Shilan Shah, a senior economist at Capital Economics in Singapore, citing falling passenger vehicle sales and slowing retail transactions. “This suggests that consumption has weakened a touch.”
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