Published on 9/07/2020 2:06:26 PM | Source: Motilal Oswal Financial Securities Ltd

India vis-a-vis other emerging markets by Motilal Oswal

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1QCY20: India vis-à-vis other emerging markets (EMs)

* 2020 is turning out to be a terrible year. With the outbreak of the Coronavirus (COVID-19) pandemic, economic growth across the world has come to a sudden stop. To counter this, almost all countries have doled out large fiscal stimulus. Global trade has halted and inflation has softened in most emerging markets (EMs). The risk-return matrix based on macro indicators (GDP growth, inflation, current account deficit and fiscal deficit) suggest that Russia, China and Korea were the worst affected in 1QCY20, while Taiwan and Brazil improved. The benchmark equity indices declined in most EMs (barring China). The 10- year bond yields have come off from its peak in Mar’20 and all EM currencies have weakened against the USD (except the NTD). However, a silver lining is the sharp rise in forex reserves in most EMs, with India leading the pack.

* This quarterly publication provides a comparative analysis of the macroeconomic conditions in the world’s 10 major EMs. Quite often, these economies are clubbed together as a basket, especially in terms of portfolio allocation.

The 10 EMs included in this publication are:

* 1. Brazil (BR), 2. China (CN), 3. India (IN), 4. Indonesia (ID), 5. South Korea (KR), 6. Malaysia (MY), 7. Russia (RU), 8. South Africa (SA), 9. Taiwan (TW), 10. Thailand (TH).



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