德意志银行-印度资本市场-capex trend：past, present and future-20170707-deutsche bank.pdfVIP

Deutsche Bank Research Asia Economics Date India India Economics 7 July 2017 Weekly Capex trend: past, present and future It has been five long years since Indias private investment growth has been Kaushik Das anemic. After an unsustainable spurt in FY11 and FY12, private investment Chief Economist growth slowed sharply from FY13 onward, with conditions deteriorating steadily +91-22-7180 4909 thereafter. With private investment remaining weak, the government has ste ed up public investment materially, especially in the last two years. Public investment in real terms has grown by an average 17.5%yoy in the last two years, which has helped to increase its share in total investment to about 28% currently, from 21% in FY12. However, given the still-large share of private sector in total investment (72%), it is clear that public sector investments, no matter how strong the momentum is, cannot fully offset the weakness in private sector capex. Consequently, in the past 5 years, India has witnessed a 5% fall in total investment/GDP in real terms. The latest CMIE capex data show that the private sector completed the lowest value of projects in April-June17, since the GFC, indicating persistence of anemic investment activity on the ground. New investment announcement momentum of the private sector has also weakened further, but at a slower pace than the previous quarter. New investment announcement gives a sense of pipeline investment potential and in this regard is a leading indicator for the investment outlook. While new investment momentum has slowed down, we note that this is ha ening on the back of a sharp incre