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All is not lost for Indian economy, upside surprises in offing: Report

Last Updated: Friday, September 7, 2012 - 20:30

Mumbai: A Deutsche Bank report today said that all is not as bad as it is being made out to be about the country and that there can be some positive surprises in the offing, as the economy is still fundamentally strong and pro-growth measures are being rolled out.

Noting that the consumer demand is still strong and the country still remains a relatively attractive destination for investors with the rising global turmoil, the report said.

"There may be an undue concentration of pessimism, which may be ripe for some upside surprise, as the economy is not dysfunctional," Deutsche Bank chief economist Taimur Baig said in a research note.

The German bank said the report was prepared after its research representatives recently met with policy advisors and economic and political thinkers in New Delhi.

Though there are domestic as well as global risks, the report notes that "despite the ongoing slowdown, the economy remains characterised by strong consumer demand, nimble business owners and continued goodwill from foreign investors as well as NRIs, thus job creation has not been impacted, nor have capital inflows."

Though it notes that the consensus is bearish on the country with strong macro headwinds, weak policy momentum and mounting political uncertainties, when growth supportive policy measures are taken, there will likely be a positive feedback as typical problems associated with a dysfunctional economy which is marked with excessive corporate and household leverage, pessimistic consumers, financial sector stress, etc) are not yet a part of the India story.

Secondly, the report notes policy is not in total paralysis. While far from satisfactory, there is movement in New Delhi to get infrastructure spending going and provide further investment incentives.


First Published: Friday, September 7, 2012 - 20:05
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