India back in sweet spot after note ban, UP polls: Richard Iley, BNP Paribas

India back in sweet spot after note ban, UP polls: Richard Iley, BNP Paribas

International News

India has hit the sweet spot again, with the underlying vibrant consumption coming to the fore as the economy bounces back from demonetisation, said Richard Iley, chief economist, emerging markets at BNP Paribas. With real GDP growth expected to average 8%, the country is a clear standout, said a BNP Paribas report that dwells extensively on “India’s sweet spot”. BJP’s victory in the critical UP election is icing on the cake for India, Iley said. “The scale of the victory surprised everybody … That sets up the realistic possibility of the NDA government retaining its majority in lower house in 2019 and likely to have a potentially workable majority in the upper house as well,” he said. “Foreign investors are now assuming this will work to further embolden the prime minister and the government to press on with relatively high-risk structural reforms.” He said even the global environment has positive implications for India. “Global growth and in turn world trade, on a number of matrix, actually looks the strongest it has now for at least six years, probably (since) the first half of 2011,” Iley said, pointing to a clutch of data from the US, commodity prices and freight rates.