Economic turnaround likely in 12-18 months, says Axis MF

Indian economy is likely to remain weak in the current calendar year but a turnaround is expected in 12-18 months, Axis Mutual Fund said today.
"We believe that overall growth will remain weak in 2014 and any rebound to trend growth will take 12-18 months," the private fund house said in a report titled 'Outlook-2014'.
It said there have been some signs of bottoming in the economy in the recent months, as reflected in exports, but added that investment cycle, which remains stuck, will be the key to any sustained pick-up in growth.
The economy, Asia's third largest, is likely to grow at around 5 per cent in the current financial year, as per official estimates.

On the fiscal situation too, the report was not very optimistic.
"Fiscal situation will remain challenged in 2014 as well. Hence, there will be a lot of pressure on the incoming government to take action to cut subsidies and wasteful expenditure," it said, adding key tax legislations like DTC and GST should be the priority for the new administration that will assume charge after the Lok Sabha polls.
The fund house said retail inflation is likely to moderate in the current year. "Low growth, fiscal tightening and falling consumption should help moderate core-CPI in 2014."
After the volatility seen in the rupee against dollar last year, the domestic currency is likely to be much more stable in 2014 even as US Fed carries out its tapering of bond buying programme, the report added.