India Growth Puzzle: October 2017
The Indian economy has slowed considerably since the first half of 2016.
- The demonetisation program and the recently-implemented GST legislation were disruptive factors. They, nevertheless, do not account for the slowdown in its entirety.
- The Indian economy enjoyed windfall gains through lower oil prices, the effect of which has largely been eroded.
- Looking ahead, the economy is expected to gain traction as the impact of disruptive factors fades away.
- A focus on supply-side reforms will likely yield better results than pursing aggressive policies to lift demand.
For further details, please see the attached document.