Barclays Sanyal Says India Needs Investment for Growth

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Siddhartha Sanyal, chief India economist at Barclays Bank Plc’s investment banking division, comments on the outlook for the nation’s economy and central bank monetary policy.

Gross domestic product rose 8.9 percent in the three months through September from a year earlier, matching the revised pace of growth in the previous quarter, the Central Statistical Organisation said in a statement in New Delhi today. That was above the 8.2 percent median estimate of 30 economists in a Bloomberg News survey. Mumbai-based Sanyal spoke in a phone interview.

“The critical factor going ahead will be how investment demand is picking up. Consumption has played its role. It can sustain you at a particular level. It cannot generate the big delta. To sustain a growth rate close to 9 percent, or consistently above 8.5 percent, investment is the key thing.

“The central bank does not have any problem in having decent growth. What they are concerned about is whether that growth is fuelling inflation. At the moment, even if the inflation numbers are not that healthy yet, we still believe that the numbers will be turning significantly softer in the next few months. Core inflation has already started softening. That’s why it does not warrant for the central bank to go aggressively for any kind of hike again.”

To contact the reporter on this story: Unni Krishnan in New Delhi at ukrishnan2@bloomberg.net

To contact the editor responsible for this story: Chris Anstey at canstey@bloomberg.net

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