December 7, 2017

India's Looking Like the Anti-Goldilocks Economy

This illustrates the government's great dilemma. Growth in India never quite slows down enough to make crisis measures necessary. ... The couple things the government has gotten right in the past few months -- its attempts to streamline the new goods-and-services tax and its determined approach to cleaning up distressed assets -- haven't been dramatic enough either to ease the RBI's worries or to push the economy to a permanently higher growth path.

Overall, this government has muddled through, producing a middling policy record and a middling growth record. Now it's clear that the RBI won't bail it out; the best chance for lower rates may have passed. Any revival of private investment -- which, as a proportion of GDP, was even lower in the second quarter than the first -- will have to come from somewhere else.

Frankly, if the government is serious about a growth revival, it will have to return to the drawing board. It still has time and political capital to spare before it has to face the voters in 2019.

Read more at https://www.bloombergquint.com/global-economics/2017/12/07/india-s-looking-like-the-anti-goldilocks-economy

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