Lewis Bentley Group warns that lowest GDP growth in years could indicate a coming slowdown for India’s once-resilient economy.
Even as India’s domestic economic growth has declined, analysts at Lewis Bentley Group say Indian consumer confidence remains strong. During the second quarter of this year, India’s consumer confidence index reached its highest point in six quarters.
India’s economic growth slowed to just 5% in the second quarter, the lowest growth seen in six years. Lewis Bentley Group analysts cite a decline in consumption for the fall in growth. Although global recession fears are on the rise, India appears to be safe for now with the country’s central government adamant that the current slowdown is merely temporary.
Last week, Union Minister Prakash Javadekar stated that the Indian economy remains on a firm footing and that the fundamentals are strong.
Lewis Bentley Group analysts have pointed out that the global slowdown has impacted on India’s domestic market and that India’s government may be forced to take steps to help shore up the economy.
India has already made the decision to implement new regulations for doing business in the country. It is hoped that the new rules will continue to encourage Foreign Direct Investment which reached record highs in 2018.
Lewis Bentley Group analysts warned, however, that recent data pointed to a multi-year slowdown for the Indian economy. Although India’s GDP has not registered negative growth for 2 consecutive quarters, thereby fulfilling the requirements for a technical recession, Lewis Bentley Group analysts believe that the significant slowdown in growth could be an early indication of challenging times ahead.