India’s Growth Crossroads

Unlike China since mid-2012, there is no clear evidence of economic recovery in India yet, as delay in implementing necessary reforms, among other factors, has weakened competitiveness. While recent measures should boost economic revival, an additional challenge is that growth must be made sustainable and more inclusive.

MANILA – As the slowdown in the world’s major industrial economies drags on, growth in developing Asia is being affected. A serious burden will likely be placed on the region’s major economies, particularly its two giants, India and China. Both countries’ external sectors have clearly been hit hard, while domestic consumption is stagnating. Fixed-asset investment in India rose by only 2.3% in the first half of 2012, compared to 9% in the year-earlier period.