Themabericht
We expect Indian GDP to contract by -8.4% (y/y) in fiscal 20/21 and grow by 9.7% (y/y) in fiscal 21/22. The INR is projected to appreciate in tandem with the expected global economic recovery and boosted by optimistic global investor sentiment.
Themabericht
On November 15th, the Regional Comprehensive Economic Partnership (RCEP) was signed, but India decided to opt out. Many consider this a policy mistake, but we argue that India’s choice is actually quite rational.
Special
Economic developments in India are mixed. On the upside, there is the prospect of an effective vaccine, fresh government stimulus and better economic performance than anticipated. On the downside, there is a risk of a second wave and the economy continues to struggle with high inflation.
Themabericht
The policy plans of the next president of the United States has consequences for the Indian economy in terms of the USD/INR trajectory, trade and GDP metrics and geopolitics.
Themabericht
Inflation in India has been stubbornly high. Although we expect inflation to come down, we believe the downward trajectory will be short-lived. Against this backdrop, the Reserve Bank of India is probably reluctant to cut its policy rates.
Economisch Kwartaalbericht Engelstalige versie
De wereldeconomie lijkt haar dieptepunt te hebben bereikt en veel landen beginnen weer te herstellen. Dit herstel wordt echter verstoord door onzekerheden die samenhangen met (i) de tweede en derde coronagolf, (ii) op de loer liggende negatieve effecten op arbeidsmarkt en productiviteit en (iii) oplopende geopolitieke spanningen.
Economisch commentaar
The Indian economy contracted by 23.9% in Q2 due to one of the most stringent COVID-19 lockdown globally. Despite a rallying rupee, uncertainty remains large, especially on the geopolitical front.
Themabericht
Against the backdrop of a crippled economy and rising debt metrics, policymakers around the globe are adopting or considering unconventional monetary policy to solve the current state of emergency. For some countries, such as India, this would be a bad idea. We show that a major MMT fiscal package could push inflation up to 12% and the currency down by 25%.
Themabericht
De roep om de geldpers aan te zetten om overheidsuitgaven te financieren is door de coronacrisis steeds luider geworden. Dit is voor veel landen riskant, omdat het kan leiden tot hoge inflatie en een ernstige verzwakking van de munt.
Special
Can we just print extra money to tackle the corona crisis? We conclude that only seven (!) countries in the world meet our proposed MMT criteria: leaving aside the US, these countries need the rare combination of a sovereign currency, simultaneous fiscal deficit and current account surplus, plus good governance.
Themabericht
Besides the border dispute with China, India continues to struggle to keep a lid on COVID-19. The twin crises has an adverse impact on India’s attractiveness as an investment destination, which might explain why the Indian rupee (INR) has barely been able to benefit from the global financial markets rally.
Economisch Kwartaalbericht Engelstalige versie
Een scherpe recessie van de wereldeconomie zal worden gevolgd door een relatief beperkt herstel, vanwege langdurige 'social distancing'. De politieke spanningen tussen de VS en China zijn weer opgelaaid, waardoor naar verwachting dit jaar de ‘Phase-1 deal’ zal sneuvelen.
Special
We have revised our economic projections for India downwards and expect the economy to contract by 2.9% in fiscal 2020/21. The economic stimulus package of 20 lakh crore is expected to prop up growth this fiscal year by 1.8ppts, but more unconventional policy measures (such as debt monetization) seem necessary.
