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The World's Fastest-Growing Economy Is Facing a Cash Crunch

  • Bank credit growth slowed in September along with auto sales
  • RBI consumer confidence survey shows lower optimism, spending
Indonesian Rupiah, Indian Rupee and Filippino Peso as Gloom Lifting From Emerging Currencies After Rate Hikes
Photographer: Brent Lewin/Bloomberg
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India’s tight money conditions and fears of a contagion following a debt crisis at a local lender dented demand and put a muzzle on animal spirits in the world’s fastest-growing major economy.

Economic growth in the July-September quarter may have retreated from the 8 percent plus expansion in the three months ended June as consumption cooled, a slew of high-frequency data show. The overall activity reading moved a notch lower in September to sit in the middle, for the first time since Bloomberg News started tracking the indicators to measure animal spirits -- a term coined by British economist John Maynard Keynes to refer to investors’ confidence in taking action.