Indian Economy Shows ‘Firming Growth’ Says OECD

In the September release of the Composite Leading Indicators (CLIs) that are designed to anticipate turning points in economic activity relative to trend, the Paris-based Organization for Economic Cooperation and Development (OECD) said India is expected to see “firming growth”.

As reported on their Website, the CLIs signal stable growth momentum in the Euro area particularly in Germany and Italy, while growth is firming in France. Stable growth momentum is also anticipated in Japan.

In Canada as well as in the United Kingdom and the United States, growth momentum is anticipated to moderate albeit from relatively high levels.

The outlook continues to deteriorate for China, with the CLI pointing more strongly to a loss of growth momentum. Signs of slowing growth momentum are also re-emerging in Russia. In Brazil, weak growth momentum is anticipated.

October 12, 2015   No Comments

Beauty and the BRIC

Euromonitor International, a provider of strategic market research, says that emerging market consumers are still spending a good amount of cash on beauty and personal care. Value sales across emerging markets were up almost 10% in 2014 over the previous year at fixed U.S. dollar prices. However, annual growth did not reach double-digit levels for the first time in more than a decade.  

GCI reports that global beauty and personal care brands are now faced with a more reticent China, where the consumption culture of its mid-income consumers is changing; a more cash-strapped Brazil as the Brazilian economy is veering toward recession, and a more inward-looking Russia. Will India be the new China? GCI asks, since it was one of the best performing emerging markets for beauty and personal care in 2014, with retail sales climbing 15% from 2013.

India has some of the best growth prospects over the next five years from among all the emerging markets. India’s economy is notably being boosted by lower oil prices, and increasingly beauty-conscious urban consumers will have the money to spend on beauty products. These trends bode well for beauty and personal care categories such as deodorants, color cosmetics and men’s grooming.

June 25, 2015   No Comments

Boston Scientific’s BRIC Sales Rise by 18 Percent

Speaking at the J.P. Morgan Healthcare Conference, Mike Mahoney, CEO of Boston Scientific a Marlborough, Mass.-based  medical device company, said the company derived about 10% of its total sales from emerging markets in Brazil, Russia, India and China during the 3-months ended Sept. 30, 2014 — an 18% increase from the same period in 2013.

Mass Device reports that Boston Scientific is looking double its emerging markets presence over the next 2 years as it seeks to catch up with larger competitors; therefore expanding its presence in emerging markets is one of five strategic imperatives Mahoney said the company is putting forward in 2015 and beyond.

May 1, 2015   No Comments

Christine Lagarde of IMF calls India a Bright Spot

Christine Lagarde, managing director of the International Monetary Fund,  says that  India a “bright spot” on a cloudy global horizon. She declared that India has the potential to double the size of its economy by 2019 compared to 2009.

During her visit to India, Lagarde commented, “India’s GDP will exceed that of Japan and Germany combined. Indian output will also exceed the combined output of the three next largest emerging market economies – Russia, Brazil and Indonesia…This year already, India’s growth rate is expected to exceed that of China,” reported Economic Times.

Christine Lagarde

Christine Lagarde

Five positive actions that  have caught the attention of the IMF chief are:

  1. The Modi government and India’s central bank led by governor Raghuram Rajan who are “skillfully shifting the focus to good macroeconomic management, transparent government, and inclusive development,” said Lagarde in an interview to Times of India.
  2. The 2016 Indian budget “struck a good growth-equity balance. There’s emphasis on increasing the provision of public infrastructure, and within a fiscally-responsible framework,” she said.
  3. India’s fast growing economy in which the IMF expects India’s GDP growth to pick up to 7.2% in the current fiscal and accelerate to 7.5% in 2015-16 – making India the fastest growing large economy in the world. Lagarde commented, “India is indeed a bright spot, and economic development holds much promise. India has an opportunity to become one of the world’s most dynamic economies. My message will be: Seize it!”
  4. “India has prepared better than most emerging-market economies for external shocks by shrinking current account deficit and increasing stock of international reserves; the higher GDP growth expected now, should help,” Lagarde noted.
  5. India’s subsidy reforms for reducing poverty, where the government has put in place a program to ensure welfare payments reach intended beneficiaries is commendable, Lagarde feels.

 

March 20, 2015   No Comments

Favorable Economic Winds Help India’s Economy Surge

Of the BRIC economies, Brazil is struggling as commodity prices fall, Russia is headed toward recession due to weak oil revenues and sanctions from Western nations, while China is slowing down. However, in India the stock market and rupee are surging; multinational companies are looking to start new operations or expand their current ones; foreign investment rules have been relaxed for insurers, military contractors, and real estate companies; and a broad tax overhaul is underway. Whether India’s momentum is sustainable or short-lived depends on whether Prime Minister Modi can push through deeper reforms.

The New York Times quotes Shailesh V. Haribhakti, the chairman of MentorCap Management, a boutique investment bank in Mumbai as saying, “All the circumstances have come together to make manufacturing and growth happen.”

With prices of crude halved, fuel costs have dropped and along with it, transport expenses and inflation. The country’s chronic budget deficits are narrowing. “We’ve got essentially a $50 billion gift for the economy,” said Raghuram G. Rajan, the governor of the Reserve Bank of India.

Modi has many economic issues on his plate that he needs to attend to: expanding the private sector’s role in coal mining, a government-dominated industry; accelerating infrastructure projects; replacing state taxes on goods that cross state borders with a national tax; and acting on bills introducing longer term reforms.

Jayant Sinha, the minister of state for finance said that the government had begun making significant changes and that “there are a lot of inherited, legacy issues” they have had to work through such as budget deficits and persistent inflation. “You have to give us a little bit of time for every business to feel the difference,” he said.

February 19, 2015   No Comments