10/10/2014
By Jennifer Coombs

Negating the more recent trends, India reported weaker-than-expected industrial production growth in August, as the manufacturing sector majorly contracted. Ultimately this means their economy may continue to sputter through the end of this year despite growing optimism for growth. The output of manufacturing, mining and utilities companies increased by 0.4% compared to a year ago. This was the same reading as July but was much lower than economists’ expectation of a 2.2% increase. Nevertheless, this is still the fifth consecutive month of year-over-year gains in industrial production.

India has been quite the basket of economic woes over the past few years due to high inflation, poor infrastructure, bureaucratic red table and very slow pace as which the government creates, enacts, and enforces legislation. This jumble of issues has subsequently hurt the confidence of investors and consumers alike. India’s exports have risen recently as automobile sales have improved, and other economic measures indicators also have suggested that the economy may be turning around.

However, the election of Prime Minister Narendra Modi and his pro-business government approach has certainly helped the mood of citizens. Policy measures to avoid economic slowdown have definitely been passed and enforced far faster than in the past, which is only helping India’s economy in the long run. 

Jennifer Coombs
Wall Street Strategies

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