Better-than-expected data out of India and Indonesia this week suggests the two Asian economies may be better placed to weather a tapering of U.S. monetary stimulus, analysts say.
Earlier this year panic over the unwinding of the Federal Reserve’s bond-buying program hit emerging markets hard, especially India and Indonesia, which have large account deficits. Indian stocks plummeted 13 percent from late May to late August, whilst Indonesia’s Jakarta Composite plunged 26 percent over the same period.
This week, Indonesia reported a surprise trade surplus of $42 million in October, against expectations of a deficit of $775 million. Meanwhile, India reported a dramatic reduction in its current account deficit to $5.2 billion for the July through to September period, or 1.2 percent of gross domestic product, down from $21.8 billion – or 5 percent – in the same period last year.
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