Alicia García Herrero (Natixis) | Will India’s gross domestic product ever surpass that of China? Ten years ago, no one would have given this question much thought. But times are changing. The Chinese economy may now be more than five times larger than India’s, but India is growing much faster than China, and no one expects that to change any time soon. Already, since 2010, India’s economy has overtaken those…
Trinh Nguyen (Emerging Asia, Natixis) | Once known for its fragility, India stands tall as not only for its best economic growth in Asia in H1 2023 but also robust asset performance year-to-date, from equity to fixed income. The resilience of its economy and financial markets, amidst the global sell-off from markets’ indigestion of the Fed’s “higher-for-longer” reflects not just India’s economic fundamentals and external balance resilience but also investors’…
Alicia García Herrero (Natixis)| India’s GDP expanded 7.8% year-on-year in Q2 2023, beating expectations and printing the highest number in a year. The major push comes from consumption which contributed nearly half of the growth. The strong demand is also fostering industrial production as India’s manufacturing PMI has expanded for 25 straight months and further risen to a high of 58.5 as of August, far above any other Asian country’s…
Crédito y Caución (Atradius) | In India, GDP growth slowed to 7.0% in 2022, down from 8.3% in 2021. In 2023, GDP growth is likely to slow even further to 4.4%, owing to a rapidly weakening global backdrop and slackening domestic demand. There is widespread weakness in the manufacturing industry. Industrial production fell month-on-month on a seasonally adjusted basis in July and August. These trends, in combination with a manufacturing…
Crédito y Caución (Atradius) | Prime Minister Narendra Modi and his government remain in a strong position. Modi’s Bharatiya Janata Party (BJP) has an absolute majority in the lower house of parliament, and the opposition remains weak on the national level. While the handling of the second coronavirus wave in early 2021 has dented Modi ́s popularity somewhat, a rising vaccination rate should help him to retain his dominant position…
For India, the sharp fall of domestic demand led to a huge decline in imports that drove the current account into surplus, giving the country savings during times of crisis. The Philippines also had a balance of payment surplus as its imports collapsed, driven by the large drop in investment and contraction in consumption, which was unprecedented. But those factors, coupled with low rates domestically and externally, pave the way for not just a financial market rebound but also an economic recovery in 2021, as funding conditions are favourable and balance sheets trimmer.
In 1993, both India and China were equally poor with GDP at USD377 per capita. Fast forward to 2019, India GDP per capita rose to USD2,104 while China fast-tracked to USD10,261… The only country that is comparable in size to China is India, as one has 1.40bn people and the other 1.33bn people, respectively. Combined, they are home to 36 percent of the world’s population. From May until the recent truce engineered in Moscow, the China-India border dispute has threatened to fracture efforts to foster bilateral ties between the two economies, such as the India banning of Chinese apps in response to the conflict.
Trinh D. Nguyen (Natixis) | In response to this, the government announced the first round of stimulus of 0.8% of on-budget cash-handouts to help vulnerable population cope. Additionally, monetary easing also helped through broad and targeted measures.
Not everything is rallying this year. India is down, which is interesting as it is a perennial favourite with international investors. Mark Tinker, Head of AXA Framlington Equities in Asia, is concerned “notably” concerned about the extent and composition of India’s growth compared to China as well as the fact that since 2013 the Chinese currency has depreciated 8% against the US Dollar while the Rupee has dropped 31%.
If you thought social media’s challenge was limited to the US, then look further. Facebook, Twitter and Google face additional challenges while dealing with India. Their ability to stay relevant and monetize is based on three factors: a) the size of their user base; b) user interaction rates with the platforms; and c) how many users trust these platforms?