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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Sep 04 2012

Is the Indian Economy Turning the Corner?

With second quarter GDP growth, despite a minor uptick, staying lower than during the worst of the Global Financial Crisis, the Indian economy remains in a deep economic slowdown. Yet, consumer price inflation remains stubbornly high, with food price inflation staying in double digits.

India has long been considered a domestically-driven economy, but its openness to the global economy has increased dramatically, with exports as a percentage of GDP climbing to a record high early this year. In other words, India is now far more vulnerable to developments in the rest of the world.

While the world’s key economies remain in serious slowdowns or outright recessions, ECRI’s latest study of the Indian economy assesses the cyclical risks facing India, with important implications for policymakers struggling to balance growth and inflation.

Related Insights

The Yo-Yo Years

ECRI March 1, 2012

The convergence of two cyclical patterns virtually dictates an era of more frequent recessions in developed economies. As a result, and because of the Bullwhip Effect, growth in developing economies is going to be jerked around more than people think, making for a good deal of cyclical economic contagion. In other words, we are now in the yo-yo years.