Markets Archives - Page 530 of 782

India’s Modi Faces Challenges but Inspires Confidence

India’s economy, which has languished in middling growth for the past few years, is on the mend under new Prime Minister Narendra Modi.

After experiencing real GDP growth of less than 5 per cent in 2013-14, the Indian economy is expected to grow at nearly 5.5 per cent in 2014–15 and then record growth rates in the 6 to 6.5 per cent range until about 2018. The Reserve Bank of India governor, Raghuram Rajan, has been more sanguine: he expects growth to increase by 1 percentage point each year after 2015 until about 2017.

South Asian Countries Should not Wait for SAARC

Since its inception in 1985, there have been questions about the effectiveness of the South Asian Association for Regional Cooperation (SAARC) to promote economic integration in South Asia. One of the biggest impediments to SAARC’s progress has been the continued conflict between India and Pakistan.

There was hope that some positive results would come out of the 18th SAARC Summit in Kathmandu on 26-27 November 2014, particularly because Indian Prime Minister Narendra Modi had repeatedly spoken of the need to reinvigorate relations with neighbouring countries.

Four Pillars of the AEC and the Looming Implementation Deadline

The ASEAN Economic Community (AEC) is unlikely to come into being by its December 2015 deadline due to its overambitious design and apathetic implementation. But there are still plenty of things that ASEAN can do to prepare for when the AEC is eventually launched.

The AEC rests on four pillars: a single market and production base; a competitive economic region; equitable economic development; and integration with the global economy.

Will 2014’s Divergence Theme Remain Intact in 2015?

It ain’t so much the things we know that get us into trouble. It’s the things we know that just ain’t so.

— Attributed to several American writers

The Gordian Knot that Binds Russia, China and Oil

As the year winds down, a Gordian knot tying Russia, oil prices and China together is receiving a great deal of attention. Let us see if we can unravel some of the confusing twists and turns.

We turn first to China’s offer of assistance to Russia. The idea that Russia could activate its CNY150 bln (~$24 bln) currency swap line with China is capturing the imagination of many.

A Preview of the Emerging Markets

EM currencies stabilized after the FOMC meeting last week. Yet the Fed clearly signaled that it remains on track to start hiking rates around mid-2015. While Yellen’s guidance was taken as dovish (tightening won’t be at a predictable, “measured” pace), we still feel the looming Fed tightening cycle remains negative for EM. Furthermore, commodity prices remain soft. This and the upcoming turn in the US interest rate cycle should maintain downward pressure on EM currencies through H1 2015.

Japan’s Strategic Energy Plan Challenges

The Great East Japan Earthquake, the tsunami and the subsequent nuclear power plant accident in Fukushima on 11 March 2011 changed Japan’s energy future drastically. The revised Strategic Energy Plan, which the Japanese Cabinet approved in April 2014, outlines a new conceptual framework for Japan’s energy policy.

More Thoughts on the Economic Prospects for Indonesia

We begin the 2014 ‘year in review’ series, looking at developments in Asia over the year past and the prospects for the year ahead, with a look at how Indonesia is travelling and the prospects for its economy.

Accelerated Economic Growth in U.S. on Cheap Oil

Economic activity is growing at an accelerated rate as oil prices reach a bottom.

The Chicago Federal Reserve announced early Monday morning that economic growth accelerated in November. The Fed’s three-month moving average from economic activity rose to 0.48 in November, up nine basis points from October.

Economic Reality Versus Optimism in Indonesia

A greater sense of optimism prevails in Indonesia about the economy in 2015 than a year ago, even though the reality is now more challenging. Growth is slowing, business costs are on the rise, and key economic vulnerabilities persist. In simple terms, the new government of President Joko Widodo (Jokowi) has been dealt a difficult hand of cards. At the same time, a revival of investor confidence is in prospect if the government can pursue a constructive reform path and there are positive signals in this regard.