Indian Economy Booming Again

In the first of two special reports on the Indian economy, we discuss current economic developments in India. In general, the economy is booming again. With the primary economic risk shifting from insufficient growth to unacceptably high inflation, the Reserve Bank of India (RBI), which has already raised rates by 100 bps, will likely tighten further in the months ahead. We expect economic growth … In the first of two special reports on the Indian economy, we discuss current economic developments in India. In general, the economy is booming again. With the primary economic risk shifting from insufficient growth to unacceptably high inflation, the Reserve Bank of India (RBI), which has already raised rates by 100 bps, will likely tighten further in the months ahead. We expect economic growth in India to slow modestly next year as exports decelerate and tightening measures begin to bite. Favorable economic fundamentals, namely the country’s high rates of domestic savings and investment and its positive population growth rate, should keep economic growth well supported in the long run. However, a number of deep-seated problems could prevent India from realizing its true potential. In a follow-up report, we will describe some of the country’s longer-run opportunities and its challenges. Thank you for your interest in Wells Fargo’s Economic Commentary by email. You are receiving this message because you have requested Economic Commentary information and updates sent via email. If you no longer wish to receive these emails, please click on the following link to access the Economic Commentary by email registration page: http://www.wellsfargo.com/economicsemail.

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