Wake-up time: These charts show why Fed taper is not India’s biggest concern

Like the child in the picture, India’s economy seems to have hit the snooze button.

Growth has slowed to below 5%, while inflation continues to remain high. Exports are also down to a crawl, while the rupee, currently stable, continues to face the medium-term pressure of depreciation over the continually slowing state of the economy.

While the current account deficit (a key problem, admittedly) has narrowed and investors may no longer be as fretful about a run on Indian assets (stocks/bonds) or the currency as before, there are plenty of other worries to keep investors occupied.

The following six charts highlight the current slothful state of the Indian economy. They reveal why domestic woes, not the US Federal Reserve’s programme to ‘taper’ its asset purchases, are the real problem for the Indian economy.

GDP

Gross domestic product (GDP) growth has been heading downhill since 2011.

According to the latest data, the Indian economy expanded by an annual rate of 4.7% in the last three months of 2013 — below analysts’ expectations. Growth has been stuck below the 5% mark (annualised basis) for at least five quarters. Dismal, really.

(Click on page numbers below for more charts)

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