India Economic Outlook 2014

UNIDOW FIS' Intelligence and Research team publishes India Economic Outlook and constantly track its economic policies to deliver "insights" to our readers. This comprehensive information on the Indian Economy along with certain policy coverage will give you a perspective of India's political outlook, economic policies, currency outlook and overall economic outlook. For feedback and to purchase complete paperback report, contact Sales Team at we@unidow.com.

 

 

India's Economic Outlook 2014

 

Last moderated on: Tuesday, Apr 22, 2014

 

 

Political Risk: (Outlook - Stable) India is going to see the most prominent federal election in its history, which is being watched by everyone across the world. By completing the full five year term and ready for handing-over the governance to the new leader democratically putting India politics on the crest. Post assembly elections, the Aam Aadmi Party (AAP) was seen as a major threat to reformists. But, its performance in Lok Sabha polls is projected to be dismal. India needs a stable government to push reforms and legislations in the house. This is possible only when a political party or a coalition reaches 272 mark in the house of people. Nevertheless, the Congress is expected to see the worst performance ever in the independent India. Yet, the BJP has no significant gain in Congress' loss. There was an apprehension while projecting the political outlook that there are some chances, elections could not give a clear majority to a single party and even to a coalition. If this occurs, the single largest party has to negotiate with the regional parties to form government at the center. In such instance, support of populist parties could spoil the economic policies and foreign policies of the reformist government and could fall short on expectations. However, the recent surveys show outstanding performance of the BJP and we rated India Political Outlook to "Stable".

 

 

Currency Risk: (Outlook - On Review) The Unidow Research & Analytic maintains a negative outlook on the national currency. Upcoming elections to the house of people and uncertainty related to the next government at the center will push the investment down in the country and eventually raising the demand for the US Dollar. Although, this outlook to be followed till first half of CY2014 and projections will be changed post elections results. There will be a positive outlook for the Indian currency if the BJP led government formed at the center.

 

 

Economic Risk: (Outlook - Stable) In our recent economic evaluation, The UNIDOW FIS has maintained a stable outlook on the overall economic prospect of the country. The challenge of overspending will be curbed and we're anticipating firm growth and minimal risk of large fiscal deficit to GDP ratio. However, with limited space for rate cut, RBI is unlikely to ease its policy rates in every meet this year due to persistent inflation and volatile industrial  output and manufacturing prices threatening the inflation prospect. RBI is giving full attention to the inflation problem, which is undermining the fragile economic growth.


 

 

Details 2010 2011 2012 2013 2014
           
Real GDP Growth 9.6 6.9 4.4 5.7 5.5
Inflation 8.5 8 8.2 7 6.2
Consumer Price Index 10.4 8.4 10 7.7 6.6
Wholesale Price Index (WPI) 9.6 8.9 7.6 6.7 6.1
Short-term Interest Rate 6 8.1 7.9 6.6 6
Long-term Interest Rate 7.9 8.4 8.3 8 7.9
Fiscal Deficit (per cent of GDP) -6.9 -8.2 -8.5 -8.1 -7.5
Current Account Deficit (per cent of GDP) -2.7 -4.2 -3.2 -3.8 -3.6

 

All figures are in per cent, unless otherwise mentioned.

 

1.  *Percentage change in GDP Deflator from previous year.

2.  **Consumer Price Index (CPI) for Industrial Workers.

3.  ***All Commodities.

4.  ^Mumbai three months offer rate.

5.  ^^10 year government Bond.

 

Data Source: OECD, World Bank, Unidow Research & Analytic and IMF.

Ratings and Economic Outlook provided by Unidow Financial Intelligence.

 

Rating Guide:

 

Positive - This rating signifies that the outlook is and optimistic and favorable for the domestic as well as foreign investors.

Stable - This outlook tells us that the rating has been used on the basis of current unfavorable domestic and global situation and post-moderation with India's peer economies with mild negative factors.

On Review - Above two ratings are considered as positive. But "On Review" is somewhat a negative outlook. This rating signifies that Unidow is doubtful on the future outlook and consider it as risky/negative for the near-term.

Negative - This is an adverse rating for the country and can be use post critical review.

Risky - This is the last rating measure and Unidow has never used it in its economic outlook report so far. As the name tells, this too is an adverse rating and shows extremely unfavorable and risky outlook.

 

 

 

Sector's Growth of the Indian Economy

 

 

 

 

Indian GDP Over the past Decade

 

 

 

Indian GDP In Numbers For FY-2013

 

Agriculture, Forestry & Fishing 16,44,834
Mining and Quarrying 2,18,910
Manufacturing 12,79,966
Electricity, Gas & Water Supply 1,70,238
Construction 7,67,388
Trade, Hotel, Transport & Communication 24,09,965
Financing, Insurance, Real Estate & Bus Service 16,17,397
Community, Social & Personal Services 13,52,314
     
  Total GDP (in INR, Ten Million) 94,61,012

 

 

USD/INR