BUSINESS
November retail inflation strengthens case for February rate cut
Not only did food prices fall by 0.6 percent from the previous month, but overall retail prices too were also lower by 0.15 percent
BUSINESS
Book Review | The Rocky Road to Prosperity
Prosenjit Datta’s book is a rare find in these lamentably polarised times—it is an impartial analysis that weighs the pros and cons carefully and hopes that policy makers have the good sense to make our dream of becoming a developed economy come true in our lifetimes
BUSINESS
Are Indian businesses getting smaller?
The share of employment in non-farm establishments employing 5 workers or less has gone up in the past five years. Around three-quarters of workers in the non-agricultural sector are employed in businesses having 9 workers or less
BUSINESS
Quick Take | PMI data for November signals to the MPC that growth is fine, but core inflation is rising
The PMI data for November, which track month-on-month changes, are very upbeat and in marked contrast to the Q2 GDP numbers
BUSINESS
What were the drivers of growth in Q2?
Out of the GVA growth of 5.6 percent in Q2, the contribution of services was 4.1 percentage points. The rest of the economy contributed the balance 1.5 percentage points. That’s how lopsided growth was in Q2
BUSINESS
Q2 miracle: when growth slumped, the unemployment rate came down
While real GDP growth fell from 6.8 percent in Q1, FY 25 to 5.4 percent in Q2, the urban unemployment rate improved from 6.6 percent to 6.4 percent, according to the quarterly PLFS survey
BUSINESS
Did RBI’s tightening of credit regulations lead to the growth slowdown in Q2?
Growth in non-food bank credit outstanding has been slowly decelerating and it has come down from 13.6 percent in August to 11.5 percent in October and further to 11.15 percent by mid-November
BUSINESS
Flash PMI shows growth accelerating, but so is core inflation
HSBC Flash PMI survey says “the rate of inflation was sharp and the fastest in just under 12 years. Firms suggested that demand strength allowed them to pass on additional cost burdens to their clients”
BUSINESS
We need a Department of Government Efficiency (DOGE) in India too
Total government expenditure in India, at 29.1 percent of GDP in 2023, is quite high among emerging Asian nations. Indonesia, Malaysia, Thailand and Vietnam all have much lower government spending to GDP ratios than India
BUSINESS
Should monetary policy be hostage to vegetable prices?
The overall CPI index has moved up from 147.2 in October 2019 to 196.8 in October 2024, an increase of a third in 5 years. And the Food & Beverage index has gone up by 40 percent over the period. Small wonder that the consumption of the masses has been hit
BUSINESS
SIP inflows at record highs, but will household flows into equities start tapering soon?
Equities as a percentage of household assets is about the same in India as in the UK, which is strange, given that India is a much poorer country
BUSINESS
The Second Coming: How Jerome Powell aided and abetted Donald Trump's return
Much attention has been paid to Fed chair Jerome Powell’s remark that he wouldn’t resign even if Trump wants him to. But if a research paper from the Institute of New Economic Thinking is right, he need have no fears on that score. On the contrary, the President-elect should give him a medal because the Fed had, through its misguided policies, helped create the economic conditions for the Trump victory
BUSINESS
Which countries are buying US securities, and how much has China sold?
While India has increased its holdings of US securities, its central bank has also added substantially to its gold reserves
BUSINESS
Despite US resistance, will China continue to narrow its GDP gap with the US?
In 2024, China’s economy is estimated to be 62 percent of the US, at current prices and in USD. By 2029, the IMF projects it will be 69 percent of the US economy
BUSINESS
Is the improvement in rural consumption on the back of increased borrowing?
A NABARD survey finds that the increase in consumption expenditure by rural households has been funded by drawing down their financial savings, on the one hand, and increasing their borrowings on the other
BUSINESS
Why is urban demand slowing down?
A Nomura report says that a mix of weaker nominal salary growth and a leaner workforce could be hurting urban consumption
BUSINESS
October Flash India PMI signals growth rebound, higher selling prices
PMI numbers for October suggest that the growth slowdown seen in the July-September 2024 quarter was temporary
BUSINESS
IMF report says markets ignoring rising economic, geopolitical uncertainties
The Global Financial Stability Report says complacency has led to valuations being too high in several markets, which makes them vulnerable to downturns emanating from policy or geopolitical shocks
BUSINESS
IMF forecasts show consumption will remain India’s growth driver
The IMF predicts that GDP growth will slow in India as pent-up demand accumulated during the pandemic is exhausted
TRENDS
In India, women hold up a third of the sky
The CAMS Survey, the PLFS and the World Bank’s South Asia Development Update all point to the need to have more women in the labour force. But we need to create more and better jobs first
BUSINESS
RBI researchers see slowdown in Q2, but believe it’s temporary
On inflation, the State of the Economy report says while food price data for October so far show a moderation in the prices of rice and pulses, except for gram, edible oil prices continued to harden after the import duty was hiked in September 2024. Also, while potato prices softened, those of onions and tomatoes recorded a steep increase. Small wonder that the RBI governor a few days ago said a 'rate cut at this stage will be premature and very, very risky’
BUSINESS
The indefatigable optimism of the Indian consumer
While the RBI surveys about the current situation on both income and employment have been largely negative, the future expectations survey paints a very different picture
BUSINESS
Bank of America Fund Manager Survey highlights pivot in sentiment away from India to China
The survey finds fund managers ‘’reluctantly bullish’’ on China and says that the sharp run-up in China equities in recent weeks has largely sapped the short-term upside potential amidst persistent calls for a structural de-rating
BUSINESS
This year’s Economics Nobel Laureates’ dystopian view of AI
Acemoglu and Johnson have said that the big companies developing and deploying AI overwhelmingly favour automation (replacing people) over augmentation (making people more productive), which means many workers will be displaced, and those who remain employed will be subjected to increasingly demeaning forms of surveillance and control
