Sweet spot coming up for India’s economy?

NEW DELHI – ANZ Bank believes that the second half of 2014 could be a “sweet spot” for the Indian economy, which is firming. Both growth and inflation look set to improve in the second half of the year, it says.

“ After months of hovering around barely positive to negative growth, we think the next industrial production (IP) print, due later this week for April, might just herald a sustainable turn to small but positive y/y growth,” ANZ says. “At the same time, as we indicated earlier, at least as far as 2014 is concerned, we seem to be coming close to a peak for CPI inflation.
“Inflation in May (out later this week) is likely to have remained close to April’s 8.6% but June onwards, favourable base comparisons should help pull food and hence headline inflation lower towards RBI’s 8% ‘objective’ for end-2014.
“While much of this improvement in both IP and inflation is likely to be ‘technical’, the IP growth improvement should prove sustainable. For inflation our outlook for 2015 is less rosy.” www.live.anz.com (ATI).