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Bank expects positive signs for India comeback

Jason OverdorfGlobalPost.com

With five key indicators due out this week, a prominent global bank expects positive signs of a comeback for the Indian economy.

  1. Bank of America Merrill Lynch expects the Index of Industrial Production (IIP) for the month of October to show 5 percent growth, after contracting last month, according to the Economic Times.
  2. It doesn't expect the third round of quantitative easing by the federal reserve, or QE III, (expected on Dec. 12) to fuel domestic inflation.
  3. The bank expects November inflation figures to have risen to 7.5 percent — but that this will represent a “peaking off” of the price rises that have plagued India for a year or more.
  4. The bank expects India's central bank to cut the cash reserve ratio (CRR) by 25 basis points on Dec. 18 to pull down lending rates to support growth.
  5. And It is hoping that the government will be able to push through the banking bill and other reforms, following its success with the move to allow foreign direct investment from retailers like Walmart.