India’s Economic Performance in 2019-20

India’s external sector gained further stability in H1 of 2019-20:

• Current Account Deficit (CAD) narrowed to 1.5 % of GDP in H1 of 2019-20 from 2.1 % in 2018-19.
• Impressive Foreign Direct Investment (FDI).
• Rebounding of portfolio flows.
• Accretion of foreign exchange reserves.
• Sharper contraction of imports as compared to that of exports in H1 of 2019-20, with easing of crude prices.

Headline inflation expected to decline by year end:

• Increased from 3.3 % in H1 of 2019-20 to 7.35 % in December 2019-20 due to temporary increase in food inflation.
• Rise in CPI-core and WPI in December 2019-20 suggests building of demand pressure.
• Deceleration in GDP growth can be understood within the framework of a slowing cycle of growth.
• Reforms undertaken during 2019-20 to boost investment, consumption and exports:
  • Speeding up the insolvency resolution process under Insolvency and Bankruptcy Code (IBC).
  • Easing of credit, particularly for the stressed real estate and NBFC sectors.
  • Announcing the National Infrastructure Pipeline 2019-2025.