By: Darren Viegas
India’s Economic Growth Disappoints
Friday India’s GDP growth numbers disappointed analysts as it was an annual rate of 4.6%-0.1-0.2% below analyst’s estimates. This decline can be attributed to a slowdown in the manufacturing sector.
The manufacturing sector contracted at a rate of 1.4% over the quarter. This contraction- according to Bill Adams of PNC Financial Services Group was due to: weakness in investment- held back by last year’s spike in interest rates, slow credit growth, and the sentiment made more pessimistic by the rupee’s volatility. India’s economy has had its growth rate fall from a high of 8% to its current levels by an increase in inflation.
This information is crucial as new Prime Minister Narenda Modi steps into power. While India is in a current state of economic stagnation and high inflation, it will be Modi’s fiscal policies that will make or break the country.
Brazil’s Real Falls Amid Slower Economic Growth In First Quarter
Friday Brazil’s real declined to a three week low as a report showed growth slowed in the first three months of the year, which added pessimism and reduced consumer sentiment. The currency stands at 2.2426 per dollar as of noon Friday.
This announcement reflects investor’s sentiments towards the Brazilian economy. The GDP numbers are the start of investors shying away from the Brazilian economy. This has been shown through the drop in demand of currency swaps.
Going forward, Brazil will need to fix its social issues- rioting, as well as economic issues if it wants to see a return of foreign investors. President Dilma Rouseff will be the integral factor in making this happen.