India Shows Resilience in EM Slowdown

India’s been championing its credentials as the world’s new growth engine while China stutters. Data suggest it’s stepped up to the plate.

August industrial production (IP) and September consumer price inflation (CPI) figures released late on Monday underscores the resilience of the economy despite headwinds like a below-average monsoon, Citi said in a note. India’s annual rainy season is a major factor for economy and this year’s monsoon is being called the worst in six years, with a 14 percent rain deficit, according to local media.

Still, IP surged to a three-year high of 6.4 percent on year in August, well above consensus and strengthening further from July’s revised increase of 4.1 percent. Driving the impressive reading were a 21.8 percent annual spike in capital goods and a 17 percent gain in consumer durables, the latter’s third straight month of double-digit gains. Overall production is benefitting from lower commodity prices as companies in India, a net oil importer, save big on input costs.


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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza