Weak business cycle conditions in the Indian economy

INDIA - In Brief 14 May 2019 by Ila Patnaik

For a few years, there has been a tension between two views of the Indian economy. One view was grounded in the GDP data, and saw high GDP growth rates. Another view was grounded in the firm data, and saw weak performance of firms. Our work on building a `coincident indicator' is a valuable path to resolving this tension. We were skeptical about the GDP data and built the coincident indicator without any use of official GDP data. The result showed output at 5% below trend by 2012, and then a slow recovery to about trend levels of output by Jan-Feb-Mar 2019. This is a recovery, but it is not...

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