The going is good for India. With crude prices retreating to 17 months low of 97 per barrel from $105 per barrel in mid June, and coal prices falling to 5 year lows, and gold prices having stuck to a seven and a half month low, the Indian economy seems poised for multi layered benefits, Deutsche Bank has said in a report.
India’s vicious economic cycle, between 2010-2013 of slowing growth, elevated twin deficits and a skewed savings profile was amplified by surging global oil and gold prices, both of which are now in retreat, the report added.
It has noted that the stage seems set for public sector banks (PSU banks), oil marketing companies (OMCs) and automobile companies to benefit greatly from the sharp dip in oil and gold prices.
All the changes would ensure a positive impact on the Indian economy, and on its external accounts, capital markets and savings profile, added the global investment bank.
Gold has slipped over 3% for the week, its biggest weekly drop since the week ended May 30. The weakness in gold has also pulled down other precious metals, with silver falling to a 14-month low.
India’s household savings have seen an unsustainable and economically inefficient share of physical savings, following escalated oil and gold prices.
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