India's feku growth exposed

by confuzzled dude Tue Dec 15, 2015 4:06 pm

Ambit's Keqiang index combines motor vehicles sales, power consumption, capital goods imports and cargo handled at airports to capture private consumption and investment demand. The name is easy to grasp and remember by investors, Mukherjee said.

While the government reported growth accelerated to 7.4 percent in the three months through September from 7 percent in the prior quarter, Ambit estimates a deceleration to 6 percent from 6.3 percent.

http://www.bloomberg.com/news/articles/2015-12-14/india-now-has-a-keqiang-index-and-it-paints-a-bleaker-growth-picture

by confuzzled dude Tue Dec 15, 2015 4:10 pm

HSBC‘s Pranjul Bhandari seconds the view. While she did not construct a Li Keqiang index, she delved deeper to look at what contributed to the headline growth. It turns out the growth mainly came from the oil sector and government supports:

We find that of the 50% share of GDP that is improving, 15ppt is more likely to have improved due to government action, while the balance 35ppt is due to the oil bounty.

What does it mean for next year? HSBC, which is more negative on India than the consensus, has the outlook:

Our key drivers of growth over the last year could face headwinds going forward. Oil prices may not see as dramatic a decline as they did over the last several quarters when falling from $110 per bbl to $40 per bbl. As the government takes on the challenge of fiscal consolidation and a higher wage bill over the next few years, prospects of additional expenditure switching (from current to capital) may also be bleak. And that’s what makes the likelihood of continued addition to GDP growth challenging over the next year.

http://blogs.barrons.com/asiastocks/2015/12/15/indias-economic-growth-is-patchy-at-best/

India's feku growth exposed

India's feku growth exposed

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