Activity bottoming out

The continued drop in new virus cases has coincided with a bottoming out in some of the real-time activity data, and the evidence from last year suggests that activity could bounce back rapidly when containment measures are scaled back in earnest. But states are likely to be more cautious when lifting restrictions this time around, in which case the recovery will be much more gradual than it was in the second half of last year.
Darren Aw Asia Economist
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India Economics Weekly

Domestic needs limit prospects for vaccine exports

India is planning to resume exporting COVID-19 vaccines from October, which should help to further boost the trade position. But with vaccination coverage still low, the domestic vaccine rollout will continue to take priority. Vaccine shipments from India therefore won’t be enough to shift the needle for rollouts in other poor EMs.

24 September 2021

India Chart Book

Global index inclusion would marginally boost bonds

Speculation is building that India will be included in major global bond indices over the next year or so. If that happens, it would highlight the local bond market’s growing maturity and be cast as a coup by the government, for which bond index inclusion has long been a stated policy aim. With vast amounts of assets tracking global indices, this would leave scope for a rise in portfolio inflows. To be clear, with India’s weighting in any global index likely to be small and increased only gradually, the impact is more likely to be marginal than transformational. Nevertheless, bond index inclusion would still bolster our view that, supported by a commitment from the RBI to keep policy very accommodative, Indian bond yields should only rise very slightly over the next 18 months even in an environment of higher US Treasury yields.   Drop-In: Evergrande – What are the risks to China and the world? Chief Asia Economist Mark Williams and Senior China Economist Julian Evans-Pritchard will be joined by Senior Markets Economist Oliver Jones to take your questions about the Evergrande situation. They’ll be covering the implications of collapse for China’s financial system and growth outlook, and assessing the global markets fallout. Register here for the 0900 BST/1600 HKT session on Thursday, 23rd September.

22 September 2021

India Economics Focus

A dive into the National Infrastructure Pipeline

The Indian government’s aim to significantly ramp up infrastructure investment through its flagship National Infrastructure Pipeline (NIP) has suffered less disruption than might have been expected during the pandemic. That is a positive for long-term growth prospects. But significant headwinds – including the weakness of the banking sector and land acquisition constraints – will prevent the NIP from having a transformational impact on the Indian economy.

20 September 2021

More from Darren Aw

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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