BackGrowth to slow in the next two quarters?
Nomura's Composite Leading Index for India suggests recovery is likely to taper off in 2016
Premium
India’s economic recovery is expected to hit a speed bump this year. Nomura’s Composite Leading Index (CLI) for India suggests that the recovery is likely to taper off in 2016.
Provisional readings of Nomura’s CLI for India, which has a two-quarter lead over non-agricultural GDP growth, suggests that the economic recovery is likely to slow in Q2 (June quarter) and Q3 (September quarter) of 2016 after rising for the past six quarters, as you can see in the chart. Nomura’s CLI is constructed as a weighted average of seven leading indicators of non-agricultural GDP growth, namely: growth in real money supply, real bank credit, non-oil imports, industrial production, BSE Sensex, visitor arrivals and the nominal repo rate.
The reasons are not hard to guess—tight financial conditions and weak global demand are continuing to hurt the investment-related sectors.
Nomura says there could be some downside risks to its growth forecast of 7.8% year-on-year in 2016, versus 7.3% in 2015.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
