Why Has the Great Indian Shopper Gone Silent?
Urban wages and spending are slumping. The government needs to counter the malaise quickly to maintain support for pro-growth policies.
Spending is weaker than expected.
Photographer: Dhiraj Singh/Bloomberg
India-watchers were startled by recent data showing that growth slowed last quarter — by a lot. Gross domestic product expanded only 5.4% between July and September compared to the same period in 2023. While healthy by developed-world standards, that was considerably lower than the Bloomberg consensus estimate of 6.5% or the Reserve Bank of India’s forecast of 7%.
There are plenty of possible reasons. In particular, many economists point to lower spending by the government. For some years now Indian growth numbers have been pumped up by continually increasing federal capital expenditures.