While still outpacing developed markets, India’s economy has slowed. Exchange traded fund investors watching this emerging market should not expect the same breakneck speeds from past years.
According to Moody’s Analytics, India’s current economic slowdown is bottoming out and is moving toward recovery, reports M. Allirajan for The Times of India.
“A combination of good luck and modestly better policies will drive steady acceleration in economic activity, although the upturn will be patchy and difficult to see for six months or so,” Glenn Levine, senior economist, Moody’s Analytics, said in the article.
Consequently, investors should expect tempered growth rates ahead. [Potential Rate Hikes Dampen India Stock ETFs]
“The days of 8% GDP growth are gone,” Levine added. “We expect the Indian economy to hit its potential growth rate of 6.5% by the second half of 2015. India’s economy has been slowing for the past three years but is nearing the bottom of the current cycle.”
Moody’s attributes the weakness to declining investments and consumer demand. GDP slowed to 4.4% year-over-year in the second quarter and is likely to maintain this pace for the rest of the year.
“The consumer slowdown is well-entrenched with discretionary spending especially weak. We expect this weakness to persist through 2014 before a return to trend growth in 2015,” Levine said.
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Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.