India’s Economy Faces Severe Challenges

India’s economy is experiencing a sharp slowdown — to the consternation of many observers. For several years, analysts and organisations such as the IMF and World Bank have touted India as the fastest-growing major economy, with the world’s brightest medium-term outlook, the Financial Times reported in a commentary. But in December the Reserve Bank of India, the central bank, cut its forecast for 2019 growth in gross domestic product to 5 per cent. That headline figure actually understates the slowdown. High-frequency indicators show that in the first eight months of the current fiscal year, non-oil exports and imports have fallen, as has production of investment goods. Production of consumer goods and real government tax receipts have both grown by only 1 per cent. Read more