Resilient remittances will aid the recovery

Remittance flows into India have been resilient in recent months and, with employment prospects for Indian migrants looking better than a year ago, they should continue to hold up well. That should provide some much-needed support for the economic recovery.
Darren Aw Asia Economist
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India Economics Update

Asset sales delay will create a fiscal hole

The postponement of the planned privatisation of two state-owned banks to next year has dealt an all-too-familiar blow to the Finance Ministry’s hopes of raising significant revenues from asset sales in FY21/22. Rather than relaxing the overall fiscal deficit target, we expect the Finance Ministry to opt to make up for the revenue shortfall by reducing spending, which would weigh on the economic recovery.

3 August 2021

India Data Response

Manufacturing PMI (Jul.)

The sharp rebound in India’s manufacturing PMI in July adds to evidence that the economy has been staging a strong recovery ever since the second virus wave receded. But with vaccine coverage still low, sustained improvements are far from guaranteed.  

2 August 2021

India Data Response

Core Infrastructure Industries (Jun.)

India’s core infrastructure industries index rebounded in seasonally-adjusted m/m terms in June, suggesting that an industrial recovery is well underway.

30 July 2021

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India Economics Update

A closer look at India’s vaccine supply projections

The government’s latest vaccine supply projections suggest that India could fully vaccinate all adults by year end. But that hinges on optimistic assumptions about production and distribution. Unless supply and logistical issues constraining the rollout are swiftly resolved, the risk of fresh outbreaks will remain a significant threat to the recovery.

7 July 2021

India Data Response

Services & Composite PMI (Jun.)

The drop in India’s PMI readings for June should soon reverse as the second virus wave has subsided and restrictions are being eased. But a rapid reopening increases the risks of fresh outbreaks, which could throw the recovery off course once more.

5 July 2021

India Economics Weekly

Taking stock of the latest fiscal package

The new fiscal package announced by Finance Minister Nirmala Sitharaman this week will only have a limited impact on both the central budget deficit and demand. It appears that the government feels it is already close to the limit in terms of what it can do to directly support the economic recovery.

2 July 2021
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