India’s Economic Growth Has Decelerated To Its Weakest Level Since 2013

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India’s economic growth has decelerated for five straight quarters to its weakest level since 2013, a year prior to Narendra Modi becoming prime minister. India’s unemployment rate is the highest its been in 45 years, and the banking system is restricted by the world’s worst bad-loan ratio.

After pouring $45 billion into the stock market over the last 6 years, expecting Modi to unlock India’s economic potential, international money managers are now unwinding those wagers rapidly. They’ve sold $4.5 billion of Indian shares since June, leading to the biggest quarterly exodus since 1999.

“The euphoria around Modi before 2014 has tapered off,” said Salman Ahmed, the investment strategist at Lombard Odier Investment Managers London.

Investors say that Modi has been too slow to enact a plethora of necessary reforms, such as revamping India’s labour laws. The growing concern is the plummeting of India’s $2 trillion stock market, and the increasing difficulties for the Bharatiya Janata Party (BJP) to create jobs for the millions of Indians who enter the workforce every year.

“They have spent all this political capital on Kashmir, which is frustrating,” said Katalin Gingold, the managing director at Cartica Management. “It seems more important to deal with the economy which looks like it could fall into a vicious cycle.”

“Absent a fast response from the government, the private sector risks facing a prolonged slowdown,” said Maupassant Chachra, an economist at Morgan Stanley.