According to official data, the Indian economy grew 7.4 percent year-on-year in the previous quarter, surging past China, according to AFP. This marks the third quarter in which India posted growth above 7 percent, outperforming China within each quarter. The good news raises the possibility that the central bank will keep interest rates unchanged. India showed expansion in such sectors as trade, manufacturing, finance and transportation.
China has a problem.
No, not Donald Trump trying to savage it any time he comes within three feet of a microphone. It’s that enormous social shifts in recent years – like the forcible relocation of 250 million people from rural areas to urban environments – have transformed the country, in the words of its Academy of Social Sciences, from “a society of acquaintances into a society of strangers.”
This is set to be one of the most important weeks of the year. EM is likely to take a backseat between the ECB monetary policy decision, the OPEC meeting, and the US jobs report. That said there are several potential sources of idiosyncratic risk on which to keep an eye.
Mining and copper production plummets as the Democratic Republic of Congo contends with a low-price commodity market, forcing authorities to cut 2015 growth anticipation from 8.4 to 7.7 percent, according to Reuters. Congo also suffered from a lacking demand from China, and Swiss firm Glencore suspended mining operations in the southeast. Congo serves as a commodity-based economy, with cobalt and copper comprising 79 percent of exports in the first part of 2015.
These are tiring times for Malaysian Prime Minister Najib Razak. Najib has so far managed to stay in power despite the flurry of attacks on his leadership. Political debacles have almost cost Najib his prime ministership and the popularity of the ruling coalition Barisan Nasional (BN). Facing the prospect of losing the people’s mandate in the 2018 general election, Najib is racing against time to regain public confidence.
In the EM equity space, Hungary (+2.3%), Korea (+2.0%), and Malaysia (+1.2%) have outperformed over the last week, while China (-5.8%), Turkey (-5.6%), and Poland (-3.4%) have underperformed. To put this in better context, MSCI EM fell -1.8% over the past week while MSCI DM fell -0.1%.
The US dollar is firm against the major currencies and nearly all the emerging market currencies as well to close out the week (and month) Participants are clearly focused on next week’s events, and in particular, the prospect of additional easing measures by the ECB. In addition, next week’s speeches by Yellen and the monthly jobs report is expected to underpin expectations for the Fed’s lift-off in the middle of December.
Personal income demonstrates small gains just as the Federal Reserve hunts for hints of rising inflation to justify increasing interest rates. According to the Bureau of Economic Analysis, personal incomes rose $68.1 billion, or 0.4%, indicating that workers have earned increased total wages and incomes throughout the United States, although the numbers have risen at a modest rate.
Africa’s natural environments and spectacular wildlife are about to face their biggest challenge ever. In a paper published today in Current Biology, my colleagues and I assess the dramatic environmental changes driven by an infrastructure-expansion scheme so sweeping in scope it is dwarfing anything the Earth’s biggest continent has ever endured.
People, food, and mining
GDP growth fell in the third quarter in the United States just as weaker manufacturing data and lower consumer confidence hindered the country’s economic recovery.
