India: Robust growth – Danske Bank
Analysts at Danske Bank points out that India’s GDP growth eased in Q3 to 7.1% y/y and suggests that it is still very robust and are looking for growth to stay in the 7-8% range in coming years.
“India has moved forward on reform under the leadership of Narendra Modi of the BJP party. In its article IV Consultation report in August, the IMF stated that ‘Stability oriented macroeconomic policies and progress on structural reforms continue to bear fruit’. The IMF commended India ‘for the important and wide-ranging reforms’.”
“India has experienced financial turmoil this year, as the major shadow banking institution Infrastructure Leasing and Financial Services was close to a collapse in September. It led to contagion to other shadow finance institutions and exposed the fragility of the financial system in India. Things have calmed again, though.”
“The steep oil price decline in recent months has provided support to the Indian economy and given a lift to the Indian rupee. India is a big net importer of oil and the drop in prices benefits India’s current account balance.”