Abstract
GDP growth slowed markedly in FY2011 as industrial and investment activity slumped and the current account deficit widened. A combination of tight monetary policy to counter persistently high inflation, strained global economic conditions, larger subsidies that pushed up the budget deficit, and lack of political consensus on resolving the policy impediments to growth were factors in the downdraft. Boosting investment and growth to match the strong performance of recent years will hinge on reaching agreement on measures to deal with long-standing and challenging policy issues. The outlook is for a moderate pickup.
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