Is India finally coming of age?

Talk of India’s potential to become the “next China” is inevitable given their enormous populations, and will intensify as China’s economy slows. Those hoping that India can match China’s former rates of economic growth are likely to be disappointed. What’s more, developments in India will not have the same impact on global trade flows, inflation or commodity markets as China did. But none of this detracts from the fact that India is already a significant contributor to global growth, and that its importance will continue to rise over the coming years.
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India Economics Weekly

Reforms on the back burner, mobile tariff hikes

With key state elections coming onto the horizon, we doubt that any contentious economic reforms will be implemented during the winter session of parliament, which kicks off next week. Meanwhile, the mobile tariff hikes announced by telecoms firms this week will add to inflationary pressure. But we don't think that will spring the RBI into immediate action.     Drop-In: Why is Asia sitting out the global inflation surge? 09:00 GMT/17:00 HKT, Thursday 2nd December https://event.on24.com/wcc/r/3546145/A9D34EF592141BEFCAC819ADB40359D5?partnerref=report Drop-In: India – How much scarring will the pandemic leave? 10:00 ET/15:00 GMT, Wednesday 1st December https://event.on24.com/wcc/r/3535749/63CC51718846E8FF3D871827AC84AF1E?partnerref=report

26 November 2021

India Chart Book

Backsliding on reforms?

The repeal this month of controversial reforms aimed at liberalising the agriculture sector is arguably the biggest political setback that the Modi government has faced since coming to power in 2014. And while the direct economic impact of abandoning those reforms is limited, the bigger concern is the signal that it sends about the prospects for other contentious reforms that could make a substantial difference to economic growth over the long term. Ahead of a major election early next year in Uttar Pradesh – India’s most populous state with the largest representation in the Rajya Sabha – the ruling BJP is now highly likely to shelve reforms on the labour market that would face stiff popular opposition. A poor performance from the BJP in that election may derail the reform agenda for even longer.

24 November 2021

India Economics Weekly

Sitharaman pleads, Das reassures

Finance Minister Nirmala Sitharaman this week made an impassioned plea for the private sector to ramp up investment to support the economic recovery, but we don’t think that firms will heed her call. Meanwhile, comments from RBI Governor Shaktikanta Das support our view that policy tightening will proceed very gradually and that rate hikes won’t come onto the agenda for several more months yet.

19 November 2021

More from Capital Economics Economist

UK Commercial Property Data Response

RICS Construction Market Survey (Q3)

The deterioration in workload expectations is consistent with the fact that, with Brexit uncertainty prolonged and commercial property values expected to fall, a strong increase in the construction activity is unlikely.

7 November 2019

European Data Response

German Industrial Production (May)

May’s industrial data add to the evidence that the weakness in the sector earlier in the year was at least partly down to temporary factors. Overall, the German economy has clearly shifted down a gear this year, but we expect growth to remain fairly strong.

6 July 2018

European Data Response

Euro-zone Retail Sales (May)

May’s euro-zone retail sales data were a little weaker than expected, but still imply that the consumer sector fared better in Q2 than in Q1. And looking ahead, we think that household spending will remain a key driver of economic growth in the region.

3 July 2018
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