S&P Global — 19 September 2024
Daily Update: September 19, 2024
The Indian Economy Has Room for Growth
By Nathan Hunt
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India has traditionally been viewed as a potential economic powerhouse. India’s economy is driven by the domestic consumption of the world’s largest population with favorable demographics. Exiting the pandemic world, the potential for economic growth has become a reality. In the fiscal year ended March 2024, GDP growth in India reached 8.2%, exceeding the government’s earlier estimate of 7.3%. If growth continues to meet or exceed forecasts of 6.7% annually through 2030–31, India will become the world’s third-largest economy and transition to the upper-middle-income category within global economies. A group of researchers at S&P Global and CRISIL have recently published a report titled “India Forward: Emerging Perspectives,” which includes an article about India’s growing role in the global economy.
Given the size and strength of India’s domestic market for goods and services, strong HSBC India Purchasing Managers’ Index (PMI) readings so far in fiscal 2024–25 are not surprising. However, India has consistently experienced the highest private sector PMI output expansion worldwide over the past year, indicating high levels of demand from an increasingly prosperous population. On the back of this demand, India’s economy has experienced higher GDP growth than any other country.
The government has taken an active role in growing the economy through investment in infrastructure and the housing sector. These investments have led to elevated levels of government debt, currently sitting at about 86% of GDP. This places India in sixth place globally for government debt as a percentage of GDP, trailing Japan, Italy, France, the UK and the US.
Further growth will require increased investment by the private sector, especially in the electronics and pharmaceutical sectors. According to CRISIL, 18% to 20% of industrial investment will come from new sectors such as semiconductors, electronics and photovoltaic module manufacturing over the next five years.
“Achieving rapid growth in high-end manufacturing and high-value-added services requires an overarching and supportive ecosystem,” V. Anantha Nageswaran, chief economic adviser to the government of India, said in a previous interview with S&P Global, “This means there is a sustained pace of expansion in digital infrastructure, along with a significant upscaling of research and development in both the public and the private sector.”
India has carefully charted a course that avoids geopolitical entanglements or trade wars over the past few decades, allowing it to trade with countries across different geopolitical spheres of influence.
Inflation remains a sticking point for the Indian economy. Food and beverage costs comprise 45% of the consumer basket in India, and food and beverage prices rose 7.0% in fiscal year 2023–24. Unpredictable monsoons and unusually hot weather have driven much of the increase in domestic food and beverage prices. India has a large agricultural sector that produces much of the food for domestic consumption, which makes the Indian economy unusually susceptible to the impact of global climate change.
Path To Net Zero: Emissions From Oil And Gas Industry Push 5-Degree C Rise
The fossil fuel sector is on track to miss 2050 net-zero targets by a wide margin, according to an analysis of data from S&P Global's Sustainable1 unit. The S&P Global Trucost Paris Alignment data indicates the 30 largest oil and gas companies in Europe and North America collectively have an emissions trajectory consistent with a 5-degree C rise in global temperatures by 2100. Trucost's alignment data assumes the rest of society will emit at the same rate as the company under examination.
—Read the article from S&P Global Commodity Insights
Australia's Manufacturing Sector Under Pressure But Price Data Limit Scope For Interest Rate Cuts
Australia's private sector returned to expansion in August but detailed sector data revealed that growth was worryingly uneven, driven by the expansion in services activity while manufacturing output continued to decline. While hopes are for the easing of interest rates around the globe to support demand, including goods demand, early indications of stubbornly elevated price trends via the PMIs suggest that the Reserve Bank of Australia will be in no rush to start cutting rates.
—Read the article from S&P Global Market Intelligence
The Liquidity Landscape: Trading Linked To S&P DJI's Indices
From short-term traders to long-term passive investors, a healthy trading ecosystem benefits market participants by promoting price transparency, market efficiency and confidence. Updating the S&P Dow Jones Indices analysis from 2019, this paper conducts a survey of the observed volumes and implied holding periods for a global and cross-asset range of listed products tied to indices produced by S&P Dow Jones Indices. The results offer perspective on the use of indices as the basis for active and passive investment strategies.
—Read the article from S&P Dow Jones Indices
Canada Preparing For New Tariffs On Mainland Chinese Products
In August, the Canadian government announced plans to impose a 100% tariff on battery-electric vehicle (BEV) imports from mainland China, as well as a 25% import tariff on Chinese steel and aluminum. The tariffs are set to be implemented in October 2024. The Canadian government sees several products as "critical to Canada's future prosperity, including batteries and battery parts, semiconductors, solar products, and critical minerals," according to a government statement.
—Read the article from S&P Global Mobility
Mexico's Oil, Gas Companies Seek More Leeway As Government Moves Forward On Reforms
Mexico is making a profound change to its legal system, one observers say will reduce the independence of the judiciary. The move, the last by President Andres Manuel López Obrador, who is leaving office Sept. 30, will be a turning point in the country's democracy, experts say, and may endanger the trade agreement it has with the US. And yet, companies in the country's oil and gas markets again are calling for more cooperation to participate in the business and help reduce the country's dependency on foreign fuels and utilize the country's untapped reserves.
—Read the article from S&P Global Commodity Insights
Listen: Next In Tech | Ep. 185: Consumer Tech Evolution
The primary exposure to advances in technology for most is in the consumer world. Phones, video and gaming are driven by the latest innovations, but have been experiencing a softening of the markets. Analyst Neil Barbour returns with host Eric Hanselman to look at recent research in consumer technology and explore some global market shifts.
—Listen and subscribe to the podcast from S&P Global Market Intelligence
Webinar: APAC’s Growing Influence On The Connected Devices Market (Sept. 25, 2024)
The Asia-Pacific region is home to a growing addressable audience of digital consumers as broadband subscriptions increase, inflation rates ease and more homegrown content emerges. In this webinar, we examine the trajectory of devices such as smart phones, smart TVs, game consoles and AR/VR headsets as well as some of the content flowing through these devices to end users. Join S&P Global analysts for a discussion on the current and future state of the connected devices segment in the Asia-Pacific region.
—Register for the webinar from S&P Global Market Intelligence