The Indian economy has been suffering a lot for the past few months due to the ongoing pandemic. But thankfully it has shown recovery in the last quarter of the year. The current economic situation is such that it has entered a balancing phase which can be termed as the “goldilocks” phase. It means that we are neither suffering too much inflation nor too much deflation. Hopes are high that we will recover soon.
Most developing economies entering the goldilocks phase
Most developing countries are expecting such goldilocks growth in the coming year. Be it india, Singapore, China, Indonesia, or other such countries, the covid-19 pandemic has made the economy suffer a lot for them too. But the positive sign is that the growth has been better in the past few months and they will enter the goldilocks phase soon. The Report stated by Morgan Stanley suggests that “India issued new guidelines to manage risks from recent festivity, the onset of winter and lax adherence. Elsewhere, social distancing measures have been tightened in Korea (with a shift to a five-level social distancing system) and in Hong Kong. In Indonesia, the transitional large-scale social distancing measures in Jakarta were extended for another two weeks until December 6″. Hope that it continues to grow more exponentially in the coming year.
The report by Morgan Stanley
Regarding the recent development in India’s economic sector, the report suggests that “The macroeconomic impact on AxJ (Asia except for Japan) from COVID-19 resurgence in different parts of the world has been manageable so far. We remain bullish and expect AxJ to transition from below-trend growth this year to a new ‘Goldilocks’ phase in 2021″. The report also suggests that economic growth has been showing positive growth and also not depleting too much. Though it is not growing too much, it is not falling too much also. Hopefully, the equilibrium will change soon and it will lean more on the positive side.
CAPEX shows momentum
Capital expenditure has shown some momentum in the Asian economies. The report by Morgan states, “Capex momentum in AxJ so far has been mostly driven by policy support in China (infrastructure, as seen in rebar shipments) and tech-related investment in Taiwan and Korea. Elsewhere in AxJ, Capex indicators such as cement, capital goods imports, and private investment index showed less bad declines. As consumption recovery broadens out and capacity utilization rises, CAPEX recovery would likely follow suit.”
The Policy Times suggestion
- It is a good indication that India has entered such an economical place where growth can be seen. It is a positive sign that we are no more depleting GDP rate and that shall impact growth unanimously.
- The Indian government must make such policies to improve the economic condition. In the years to come, we need to make more positive growth to make india a powerful economy like the pre-pandemic situation.