India’s annual economic growth probably moderated to 7.4 percent in the July-September quarter, according to a Reuters poll, weakening just as Prime Minister Narendra Modi’s Hindu nationalist led-government gets set for an election due by May.
That is still faster than China, but a come down from the more than two-year high of 8.2 percent set in the June quarter and some economists foresee the slowdown continuing through to the election at least.
“The economy is likely to slow down in the second half of the current fiscal year (ending in March),” A. Prasanna, chief economist at ICICI Securities Primary Dealership in Mumbai said.
Prasanna was cautiously optimistic about the outlook, but much would depend on the election outcome.
“Any signs of political uncertainty could affect market and business sentiment,” he said.
Meantime, while the growth rate may look respectable, the weakening trend is worrying as India needs growth of 8-percent-plus to generate enough jobs for the more than 12 million young Indians entering the labor force each year.