Back in Delhi after an outstation trip, I must say the first
two days of the week brought little surprise or cheer to me in terms of
developments in the economy or the markets. Of course, it is easier on
everybody’s nerves not to see the rupee fall the way it did last week. While driving back from work yesterday, I heard something interesting on
a radio show reviewing the stockmarkets for the day. It said that the rating agency Moody’s
doesn’t see its India rating change due to the fall in rupee (this is an old news though). The reason: Since India’s political leadershop doesn’t
look well-placed to bring about the much-needed adjustments in the fiscal space
it thinks that the rupee’s correction accurately reflects the country’s
realities. Coincidentally, this is a line I and my co-authors took last week when we
wrote the latest cover story of Outlook Money magazine (www.outlookmoney.com). The issue hits the stand today. Hopefully, our readers will like the cover story and will find it useful. The other disconcerting
news coming in is the slowdown in China. Over the weekend, I read an
interesting New York Times article on the slowdown there. The link is given
here. http://www.nytimes.com/2012/05/25/business/global/chinas-once-hot-economy-is-turning-cold.html?pagewanted=all.
Then, there is a video link from the Financial Times http://video.ft.com/v/1660792089001/China-faces-difficult-choices.
The China real estate and construction scene always looked dicey to me. But now
things should be worrying. The other interesting update I have managed to get
is about the Brazilian economy. Apparently, in that country as well the
authorities have tried to cool things down and they are now looking at a growth
rate of about 4 per cent. Like India, it needs further reforms. A recent
Economist articles argues on the same line. Here is a Wall Street Journal
article link on demand for Brazilian debt http://online.wsj.com/article/SB10001424052702303395604577434412657454798.html?mod=rss_markets_main.
Before I sign off, I need to say I thoroughly enjoyed reading the recent
Economist survey on retail banking http://www.economist.com/node/21554742.
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