Slowdown Threatens Indian Economy Even As Its Rich Keep Spending
NDTV
The country is heading for a slowdown, analysts say, as rising inequality squeezes consumer spending among the poor - and the hundreds of millions in the middle class.
India's booming economy is the envy of other major markets. But beyond the hype and expectation, people who watch the country closely are flagging warning signs.
The country is heading for a slowdown, analysts say, as rising inequality squeezes consumer spending among the poor - and the hundreds of millions in the middle class. The pessimism comes even after the latest growth figures blew past estimates last week, rounding off an expansion of more than 7% for the fiscal year.
"Consumer fatigue appears to be setting in," said Kunal Kundu, an economist with Societe Generale SA in Bengaluru. The economy may slow "substantially," he said.
Any cooling - especially one driven by inequality - would pose a challenge for Prime Minister Narendra Modi as he seeks a third term in general elections next year. It would also increase the chances the central bank, which decides on monetary policy this week, will cut interest rates earlier than expected.
