Economics
Demand Cooling in India Explains Why Central Bank Held Rates
- RBI’s surveys show consumer confidence has taken a hit
- Capacity utlization rate in manufacturing sector has fallen
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For those surprised by India’s decision to hold interest rates last week, the central bank’s forward-looking surveys hold some explanation: demand in the world’s fastest-growing major economy may be cooling.
The capacity utilization rate, consumer confidence, and the outlook for demand in the manufacturing sector in the third quarter were less optimistic, the results of separate surveys released by the Reserve Bank of India show. That bodes ill for an economy already grappling with a weak rupee and elevated prices of crude oil -- the nation’s top import.