Is India Experiencing a Real Slowdown?

The last 2-3 days of market activity may suggest that bullishness is returning to the markets, but real economy numbers have no cheer at the moment.

A recent Citi report says this about the aviation sector:

Domestic passenger growth over Jan-Feb08 has declined to 11.5% YoY, following 14% Y/Y growth in Dec - in stark contrast to the 30%Y/Y growth exhibited over Apr-Nov 07. This is the third month of relatively slower growth, and does not augur well for the domestic aviation industry – especially over FY09 – given that seat capacity is forecast to grow at >20%. Airline managements are now concerned – if this trend persists into Mar-Apr 08 we think there will be considerable pressure on airlines to defer capacity induction in FY09E.

There is minor anecdotal evidence of slowdown in business travel. Downtown Mumbai hotels have occupancy down to 50% or so, it appears. Is this a blip, or symptoms of a wider slowdown? Another piece indicates tgat truckers are saying business is slowing...

Comments

[Zyx007:]

Not sure if I agree with the Mumbai hotel occupancy figures. In end Feb., the cheapest deluxe hotel I got in the city area was USD 450 plus tax a night, and the first three hotels I checked (Taj, Oberoi, Hilton Towers) were all sold out.

2008 Apr 02 10:53 AM

[hepp2:]

The markets in India could be as oversold as they were overbought six months ago.

2008 Apr 02 11:23 PM

[ratsharp:]

wait for the cues on monsoon.. thats the real deal for any bermudan money to come in ... thats where they mix the hedge fund vodka with the weather reinsurers juice... for india it will be the make or break before thy hit the next bump called elections..

2008 Apr 04 04:21 AM

[someguy18:]

bermudan money? monsoon? can you explain further what these mean...seems interesting.

2008 Apr 09 09:45 AM

[BadArticle:]

The author has written just an another half baked article. Taking into account just 2 sectors for domestic aviation/hotel booking(again cooked/fudged figures) without any official stats quote he has come up with some half baked conclusion. I think he just wants to be different. Don't need an CFA with decade experience to do such things.
What happens sector like consumer/corporate spending, growth in infracture, services, manufacturing?

2008 Apr 09 05:41 PM