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Sign of recovery or meaningless spurt?
Dec 24, 2015

Talking of a turn in cycles, the fortnight to 11 December has seen a sudden but definite spurt in bank credit. Bank credit grew 11% YoY during this period. As the chart shows, this is well beyond the growth that was being logged in during the preceding part of this fiscal.

This might be too small a period to draw any major conclusions from. Nonetheless, bank credit growth is an important data point. It is usually the first to pick up during a turn in the economic cycle. And reports indicate that there has been a definite uptick here since the Reserve Bank of India cut repo rates.

Another point to consider before taking this data too seriously is that this increase must come from higher lending to companies rather than to individuals for it to be meaningful from an economic cycle point of view.

Data Source:RBI, Livemint

This Chart Of The Day was published in The 5 Minute WrapUp - Should the GST Bill Change the Way You Invest?

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