India’s tight money conditions and fears of a contagion following a debt crisis at a local lender dented demand and put a muzzle on animal spirits in the world’s fastest-growing major economy. Economic growth in the July-September quarter may have retreated from the 8 per cent plus expansion in the three months ended June as consumption cooled, a slew of high-frequency data show. The overall activity reading moved a notch lower in September to sit in the middle, for the first time since Bloomberg News started tracking the indicators to measure animal spirits — a term coined by British economist John Maynard Keynes to refer to investors’ confidence in taking action. Signs that consumption, a key driver of growth, is weakening is bad news given the absence of private investments.
India facing a cash crunch as bank credit growth slows down in September
