India is in “double trouble”, Neuberger Berman’s Saldanha warns

India is in “double trouble” of weakening growth and waning business confidence, warned today Conrad Saldanha, portfolio manager for emerging market equities at Neuberger Berman.

“Like the rest of Asia, India’s growth has slowed recently to a tune of 5.6% in the first quarter of 2012,” Saldanha said.

However, unlike other Asian emerging economies, monetary and fiscal options aimed at stimulating the economy are limited for India’s policymakers given the country’s high inflation (7.5%) and budget deficits (5.8% of GDP).

Business confidence has also waned, as desperately needed regulatory reforms stall due to political wrangling, the manager added.

“While pessimism is high, the silver lining might be that the weak rupee, down about 25% against the US dollar in the past year alone, can be a boon to exporters,” Saldanha said.

The manager is responsible for $2bn of emerging market equities assets and is also a portfolio manager advising the global equity team.

To know more about investment ideas in India, you can read ‘India: Good Growth, Bad Growth’ by Matthews International Capital Management. 

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