Weak External Demand A Drag On India's Growth In FY16: Macquarie

A confluence of factors, including weak global demand, a sharp drop in global commodity prices and appreciation of the real effective exchange rate will slow down  India’s growth in fiscal year 2016, notes Macquarie.

Tanvee Gupta Jain of Macquarie in a July 16, 2015 research note “India Insight” argues that India’s current account deficit will remain manageable in FY 16.

Stable trade deficit in June

Jain notes India’s monthly trade deficit stood at $10.8 billion (6.2% of GDP annualized) in June compared to $10.4 billion in May.

However, the analyst points out that on a three-month trailing basis, India’s trade deficit narrowed to 6.2% of GDP annualized in the June quarter,...