Mumbai: The German financial service major Deutsche Bank on Wednesday said that the Indian economy has seen its worst in the last few years and is poised for a cyclical reco-very as a stable government at the Centre helps remove fears of political instability. It said that the painful macro adjustments in the last couple of years have weighed on India’s growth and investment momentum, but the economy seems positioned now to enjoy the fruits of this economic re-balancing.
“With election uncertainty out of the way, it is reasonable to expect investment momentum to start improving from FY16 onward, which leads us to forecast 6.5 per cent growth for FY16 (vs. 5.5 per cent in FY15),” Deutsche Bank said. While the recovery in the investment cycle remains weak at this stage, there are some nascent signs that a turnaround could be around the corner.
One leading indicator according to Deutsche Bank is the trajectory of non-oil and non gold imports. On a three month average basis, the non oil and non gold imports growth turned positive from June 2014 onward and is currently running at a rate of 11.6 per cent.
