India to report GDP growth accelerating as economy stabilises
India will report growth figures for the three months to June today, which is expected to come in at 6.6%—an increase on the 6.1% posted in the first three months of the year.
The acceleration is good news for Prime Minister Narendra Modi, whose controversial economic policies have made headlines for all the wrong reasons recently. Most questionable was Mr Modi’s decision to withdraw 86% of the country’s bank notes at short notice last November—a move that hit spending and consumer confidence, particularly among rural Indians. As a result, India lost its status as the fastest growing major economy to regional rival China.
While it’s unlikely India will regain that title today (Beijing reported 6.9% growth last quarter), the IMF believes the subcontinent is on the cusp of a period of strong, stable growth that could well see it leapfrog Japan to become the world’s fourth largest economy in the coming decade. Driven by favourable demographics, India’s boom has been harnessed by Modi’s structural reform agenda—including a unified sales tax, increased infrastructure spending and plans to reform labour laws.
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