Reasons for optimism as 2014 ends

On the face of it, 2014 has been another disappointing year for the Indianeconomy. Growth over the first three quarters averaged just 5.2% y/y, only asmall improvement from the trough of 2012-2013 and still far below the ratesachieved in the prior decade. But digging a little deeper, there havebeen a number of positive developments. Current account vulnerabilities are farlower now than they were a year ago. Meanwhile, inflation has fallen to multiyearlows. With the BJP-led government’s reform agenda now also beginning tobuild momentum, the Indian economy should start 2015 on a brighter note.