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May 14, 2024
India Inflation Review: Sticky Prices to Keep RBI Cautious
May 14, 2024 3:54 AM UTC
India’s consumer price inflation eased amrginally to 4.83% yr/yr in April, reflecting lower fuel and light prices. The government cut prices of LPG cylinders in India ahead of the elections. However, food price pressures persist despite various supply side measures, underscoring the sticky nature
May 13, 2024
Watts at Stake: India's Looming Power Shortage
May 13, 2024 6:58 AM UTC
India's power sector faces rising demand and power shortages, sparking fears of the most significant power shortfall in a decade. With coal imports continuing to rise and hydropower generation declining, India's aim to become a manufacturing hub could become challenging. Energy transition is likely
May 10, 2024
Asset Allocation 2024: Tricky Seven Months Remaining
May 10, 2024 1:06 PM UTC
Fed easing expectations for 2025 and 2026 can shift from a terminal 4% Fed Funds rate towards 3%, as the U.S. economy slows due to lagged tightening effects. Combined with Fed easing starting in September this should mean a consistent decline in 2yr yields. However, 10yr U.S. Treasury yields wil
May 03, 2024
EMFX: Diverging On Domestic Forces Not Less Fed Easing Hopes
May 3, 2024 10:45 AM UTC
While U.S. economic developments, plus Fed policy prospects, will be important in terms of EM currency developments, domestic politics and fundamentals will also be decisive. These can keep the South Africa Rand volatile in the remainder of 2024, given the risk of a coalition government and African
April 29, 2024
Growth Gains But Inflation Pains: RBI's view on Indian Economy
April 29, 2024 12:42 PM UTC
Minutes of the latest Reserve Bank of India (RBI)'s monetary policy committee meeting revealed a nuanced outlook blending optimism regarding India's growth trajectory with apprehensions surrounding inflationary risks. While upbeat macroeconomic indicators paint a favourable picture, the committee re
April 26, 2024
Headwinds To Long-term Global Growth
April 26, 2024 9:30 AM UTC
Bottom line: While much focus is on the cyclical economic position to determine 2024 monetary policy prospects, the 2025-28 structural growth trajectory differs to the pre 2020 GDP trajectory for major economies. While global fragmentation has a role to play, aging populations are already having a
April 22, 2024
The Pulse of the Nation: Insights into India's 2024 Election
April 22, 2024 7:54 AM UTC
As India braces itself for the upcoming elections, the political landscape is rife with anticipation, strategy, and uncertainty. With the ruling Bharatiya Janata Party (BJP) seeking to consolidate its power and a diverse coalition of opposition forces vying for a chance to unseat them, the stage is
April 17, 2024
April 15, 2024
India Inflation: Risks Tilted to the Upside
April 15, 2024 12:35 PM UTC
India's inflation trajectory in March 2024 showcased divergent trends in both consumer and wholesale price indices. While consumer inflation dipped to its lowest in ten months at 4.9% y/y, wholesale inflation rose to 0.5% y/y, driven by surging food prices. The outlook suggests gradual WPI escalatio
April 11, 2024
RBI Holds Rates Firm, Citing Room for Economic Growth
April 11, 2024 5:44 AM UTC
In line with our expectations, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) chose to maintain the policy repo rate at 6.5% in its latest meeting. The decision reflects their aim to gradually scale back stimulus measures while still supporting economic growth. It also unders
April 04, 2024
RBI to stand pat in April
April 4, 2024 7:25 AM UTC
The Reserve Bank of India (RBI) is gearing up to announce its first monetary policy decision for FY25 (April-March) on April 5. For the upcoming meeting, we anticipate that the RBI will likely keep the repo rate unchanged at 6.5%, given the optimistic outlook for economic growth and still elevated i
April 03, 2024
April 02, 2024
Asset Allocation: Pausing for Breath
April 2, 2024 9:00 AM UTC
Into Q2, data and policy (actual and perceived) will dominate DM markets. The ECB will likely take the spotlight with a 25bps cut on June 7, as the Fed face a better growth/more fiscal policy expansion and a tighter labor market than the EZ but also with a better productivity backdrop and outlook to
March 27, 2024
March 26, 2024
EM FX Outlook: Domestic Drivers Key
March 26, 2024 9:01 AM UTC
In terms of spot EM FX projections domestic drivers remain critical, with a desire to avoid appreciation versus the USD for some countries. Fed easing in H2 2024 should however help EMFX more broadly and allow some recovery in spot rates (e.g. Indonesian Rupiah (IDR), South African Rand (ZAR)
March 25, 2024
March 22, 2024
Asia/Pacific (ex-China/Japan) Outlook: Election Spending to Drive Growth
March 22, 2024 12:18 PM UTC
· In 2024, growth trends across emerging Asia will exhibit a mixed pattern. Encouragingly, there will be a resurgence in demand for global electronics following a period of stagnation in 2022‑23, which will provide a boost to regional trade. Moreover, the initiation of monetary policy
March 11, 2024
Elections to Keep Asia in Limelight in 2024
March 11, 2024 9:05 AM UTC
2024 is turning out to be a significant year for the Asian political scene. At the start of the year, eight countries were scheduled to hold elections this year, with close to 2.2bn people voting this year across emerging Asian economies.
With elections now over in four of the eight countries, the
March 08, 2024
India's Q3 GDP: Strong But Uneven Growth
March 8, 2024 2:30 PM UTC
India's economic landscape witnessed a remarkable upswing in Q3-FY24, with a real GDP growth rate of 8.4%, surpassing both street estimates and the Reserve Bank of India's (RBI) projections. This surge not only solidifies India's position as the fastest-growing major economy globally but also unde
February 28, 2024
India Real GDP Preview: Moderating government spending to weigh on growth in Q3-FY24
February 28, 2024 1:57 PM UTC
India's economic landscape in FY24 continues to impress with robust growth across various sectors. However, it appears that the economic activity is losing steam. Moderating government spending and high inflation are likely to have been a drag on economic growth. Given recent high frequency data, ou
February 26, 2024
Farmers March to Delhi as Government Proposal Rejected Amid Election Tensions
February 26, 2024 7:35 AM UTC
In India, widespread farmer protests persist, demanding Minimum Support Prices (MSP) for all commodities, pensions and debt forgiveness. Despite multiple negotiations, the recent central government proposal to purchase specific crops at MSP for five years was vehemently rejected by protesters, promp
February 23, 2024
RBI Minutes Reveal a Cautious Committee
February 23, 2024 10:42 AM UTC
The Reserve Bank of India's (RBI) latest monetary policy decision, as reflected in the minutes of the February Monetary Policy Committee (MPC) meeting, presents a nuanced landscape of optimism about India's growth prospects, juxtaposed with concerns over inflation risks. The views of various MPC mem
February 22, 2024
EMFX: Carry and Domestic Fundamentals Rather Than the USD
February 22, 2024 10:00 AM UTC
Bottom Line: Most major EMFX currencies have performed better than the Euro or the Japanese Yen against the USD in 2024 (Figure 1). This is due to carry trades in Latam, but elsewhere reflects global equity love on Indian equities or domestic fundamentals. This resilience for Brazilian Real/Indi
February 13, 2024
BJP's Political Confidence Shines Through in India's FY25 Interim Budget
February 13, 2024 10:44 AM UTC
India's interim budget for FY25 presented ahead of the upcoming general election, reflects the government's commitment to economic growth, infrastructure development, and fiscal responsibility. Finance Minister Nirmala Sitharaman highlighted key aspects of the budget, emphasizing a multi-pronged app
February 12, 2024
Reserve Bank of India Review: No Rate Cut On The Horizon
February 12, 2024 6:25 AM UTC
The Reserve Bank of India's Monetary Policy Committee, led by Governor Shaktikanta Das, chose to keep the repo rate unchanged at 6.5% for the sixth consecutive time, aiming to support ongoing economic recovery while ensuring a sustained decline in inflation. Despite signs of inflation moderation and
January 31, 2024
Reserve Bank of India Preview: No Rate Cut In Near Term
January 31, 2024 11:11 PM UTC
The RBI will keep the repo rate unchanged at 6.5% during the upcoming monetary policy committee meeting on February 8th. The current tight stance is expected to persist until at least mid-2024, as the central bank foresees inflation averaging 5.4% year-on-year in FY24, ending on March 31, 2024, befo
January 23, 2024
India Rising: Upward Trajectory to Sustain
January 23, 2024 3:07 PM UTC
India's economic landscape in FY24 continues to impress with robust growth across various sectors. With a stellar GDP performance in Q2, heightened foreign investments, and impressive performance in areas like aviation and coal production, India’s growth trajectory appears to be increasing consist
January 16, 2024
January 11, 2024
Webinar Recording December Outlook: Rate Cuts Into 2024
January 11, 2024 8:22 AM UTC
You can now access the webinar for the December Outlook here.
To read the individual chapters please see the weblink below.
Outlook Overview: Rate Cuts Into 2024 (here)
U.S. Outlook: Slower Growth to Sustain Improved Inflation Picture (here)
LatAm Outlook: Diverging Paths in 2024 (here)
China Outloo
January 08, 2024
Charting our Views December Outlook
January 8, 2024 9:05 AM UTC
Outlook Overview: Rate Cuts Into 2024 (here)
Economic Scenarios
U.S. Outlook: Slower Growth to Sustain Improved Inflation Picture (here)
LatAm Outlook: Diverging Paths in 2024 (here)
Brazil Policy Rate and CPI Inflation (YoY, %)
China Outlook: Headwinds To China Growth (here)
Japan Outlook: Normalizing
January 02, 2024
December Outlook: Rate Cuts Into 2024
January 2, 2024 9:53 AM UTC
Outlook Overview: Rate Cuts Into 2024 (here)
U.S. Outlook: Slower Growth to Sustain Improved Inflation Picture (here)
LatAm Outlook: Diverging Paths in 2024 (here)
China Outlook: Headwinds To China Growth (here)
Japan Outlook: Normalizing Monetary Policy Soon (here)
Asia/Pacific (ex-China/Japan) Outlook:
December 19, 2023
December 18, 2023
Outlook Overview: Rate Cuts Into 2024
December 18, 2023 3:42 PM UTC
· Uncertainty still prevails around this central view. The impact of lagged monetary tightening could be greater than our estimates and deliver mild recessions in some DM countries. We also feel that the disinflationary process could be stronger and this would help bring inflation back
December 15, 2023
Equities Outlook: Rate Cuts To Help in 2024
December 15, 2023 11:00 AM UTC
Equities Outlook: Rate Cuts To Help in 2024
· For other DM equity markets, EZ and UK are undervalued in contrast to the U.S., but are in or close to recessions and economic recovery will likely be weak and disappointing. Though the ECB and BOE will likely ease in Q2 with the Fed, we
December 05, 2023
BJP Sweeps Heartland States, Sets Modi Up For a Hat-trick
December 5, 2023 10:36 AM UTC
Five years ago, the Congress had secured victories in all three states, but the tide turned decisively in this election. The BJP, under the leadership of Prime Minister Narendra Modi, not only retained power in Madhya Pradesh but also wrested control of Rajasthan and Chhattisgarh from the Congress.
December 01, 2023
India's Robust Q2 FY24 Economic Growth Defies Global Challenges
December 1, 2023 12:04 PM UTC
Figure 1: India GDP and leading growth sectors (% y/y)
Source: MOSPI, Continuum Economics
A significant driver of this impressive growth was the remarkable increase of 10.9% y/y in capital formation and a substantial 12.4% y/y surge in government spending. This was primarily driven by the government's
November 22, 2023
Asset Allocation for 2024
November 22, 2023 8:00 AM UTC
We argued for lower 10yr U.S./EZ government bond yields; higher equities and lower USD for our end 2024 forecasts in the September Outlook (here). Are we still on track for this profile over the next 13 months?
Figure 1: Key Asset Market Forecasts for 13 months to End 2024 (%)
Source: Continuum Econom
November 16, 2023
Long-term Forecasts to download in Excel
November 16, 2023 10:38 AM UTC
We present our annual forecasts that go out to 2030 for GDP Growth, Inflation, and Monetary Policy and to 2028 for Exchange Rates. The file contains five sheets: a Country Coverage summary page and a sheet for each of the four indicators.
The forecasts are consistent with the Long-term Forecasts: DM
Long-term Forecasts: DM Policy Easing
November 16, 2023 8:44 AM UTC
The Continuum Economics research team has spent much of the last month researching, reviewing and debating our long-term GDP, CPI inflation and central bank policy rate forecasts for 2025-30. Alongside a reassessment of long-term factors such as productivity and demographics, we have examined the la
October 23, 2023
Asia and Elections: Country Risk
October 23, 2023 7:29 AM UTC
Asia Regional Overview
India continues to be an investor haven supported by strong economic growth and stable policy guidance. The political environment is heating up in India as well, as the country prepares for regional elections in five states in end-2023 and then for the larger general elections
October 20, 2023
Asia Country Risk Ratings
October 20, 2023 3:21 PM UTC
Cambodia
Cambodia’s overall risk level remains medium high. Samdech Hun Sen remains the prime minister of the country and leader of Cambodia’s People Party (CPP) and has been since 1985. Hun Sen won the 2023 election with a 76.85%, winning 120 out of the 125 seats. The leader of the Cambodia Nati
October 13, 2023
India's Current Account: Striking a Balance Amid Economic Shifts
October 13, 2023 10:36 AM UTC
Figure 1: India Current Account (US$bn)
Source: RBI
Closer scrutiny of the invisibles account reveals that the net receipts from services went down from US$ 39.07bn to US$ 35.1bn during the quarter. Similarly, net transfers declined from US$ 24.76bn to US$ 22.86bn. However, net outflow of income reduc
October 11, 2023
India's Upcoming State Elections: A Crucial Test for the Opposition Bloc
October 11, 2023 12:00 PM UTC
The five-state elections are being viewed as a virtual semi-final for the upcoming lower house (Lok Sabha) polls, which are set to be held in April-May next year. These elections serve as a sandbox for shaping electoral narratives, coalition arrangements and leadership decisions. Of particular inter
September 28, 2023
Equities Outlook: Diverging Earnings and Valuations
September 28, 2023 6:33 AM UTC
Risks to our views: Larger than expected effects from DM monetary tightening could cause downside surprises on U.S./EZ growth and hurt the global economy and earnings outlook. Equities would see a volatile 2024, with downside and then a rebound (on more aggressive policy easing) but less overall net
September 27, 2023
Asia/Pacific (ex-China/Japan) Outlook: Public Spending to be Catalyst
September 27, 2023 2:11 PM UTC
Our Forecasts
Source: Continuum Economics
Risks to Our Views
Source: Datastream
Regional Dynamics: Governments to Prop-up Growth
As in 2022, emerging economies in Asia demonstrated their continued outperformance compared to other emerging markets and exhibited greater resilience compared to developed