Indian economic indicators show signs of re-acceleration, says report

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Morgan Stanley said in its report that in October 2022, after the festive season, economic indicators in India are showing a boom again.

The report said that after slowing down widely following the festive season in October, which raised investor concerns, Indian economic indicators have once again started showing a rebound in early 2023.

“Government policies are still heavily geared towards reviving private investment, which we expect will continue as strong trailing demand has already pushed up capacity utilisation,” the report said.

The report further says that the government’s budget for FY24 was another step in the right direction to rush in private investment.

According to a Bloomberg report, India’s economic expansion likely slowed in the October-December period due to rising borrowing costs, which dampened consumption, a key growth factor.

Meanwhile, economists are projecting a growth of 6.9 per cent from April 2022-March 2023 which is lower than the government’s forecast of 7 per cent but slightly higher than the IMF’s 6.8 per cent.

“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 a drop in passenger vehicle sales and slowing retail transactions. “It shows that consumption has weakened a bit.”

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