- February 6, 2023
- Posted by: admin
- Category: Centennial Asia Insights
With fy24 budget, india shows signs of shift in growth strategy
- The Modi administration’s latest budget will have a mildly contractionary stance for the economy. This is broadly appropriate to balance consolidation and growth concerns.
- The boost in public capital spending is welcome given the growing demands on India’s infrastructure, although questions remain on the pacing and quality of investments.
- Consolidation is largely helped by a reduction in expected subsidy spending, as the price shocks of the previous year dissipate and selected schemes are revisited.
- The budget also shows signs of subtle shifts in the government’s economic and political strategy as it aims to boost both India’s growth and Modi’s electoral prospects.
China: the growth rebound will be restrained
- We disagree with the rush to aggressively upgrade growth forecasts for China and continue to expect economic growth this year to be around 4.5%.
- The drag from the property sector and diminished space for policy support will restrain the strength of the economic rebound.
- Nevertheless, China’s rebound, however partial, will have positive effects on other economies via outbound tourism, commodity tailwinds, and looser financial conditions.
- US-China ties will not be derailed for long by the bizarre incident of the Chinese surveillance balloon intruding into American air space.
- Hong Kong faces a full year of GDP contractions amidst trade and investment woes.
- Taiwan’s export orders continue to face difficulties, but 2022 was a good year overall.
- South Korea faces a record trade deficit induced by plummeting exports, while also experiencing a setback in disinflation due to high energy prices.
- The ongoing controversy over the Adani Group raises broader questions about the government’s economic strategy and India’s corporate and regulatory governance.
- Thailand: a recovery underpinned by robust turnarounds in tourism and consumer spending is underway. Inflation risks are, however, rising.
Read more: CAA-Weekly-6-feb-2023.pdf