India's Economy Is Buzzing But Weaker Exports Could Be A Drag
NDTV
The needle on a dial measuring the so-called Animal Spirits swung to six after staying at five for three consecutive months, signaling some strengthening in Asia's third-largest economy.
India's economic activity picked up pace in April on record tax collections and a booming services sector though rising unemployment and weaker trade metrics could sap some sentiment.
The needle on a dial measuring the so-called Animal Spirits swung to six after staying at five for three consecutive months, signaling some strengthening in Asia's third-largest economy. While six of the eight high-frequency indicators compiled by Bloomberg showed an improvement, a slowdown in India's key export markets and high jobless rate may cloud prospects.
The reading comes ahead of the Reserve Bank of India's monetary policy decision due June 8, where it is likely to stay on hold as central bankers assess the impact of past year's rate hikes on growth and inflation.
Positive economic indicators would give comfort to the rate setters that an aggressive tightening hasn't choked up the economy, allowing borrowing costs to remain elevated for longer to keep inflation within the target range of 2%-6%. Retail inflation slowed to an 18-month low of 4.70% in April.
