Page 27 - Artha

Global Trends

Global India’s until it reaches a maximum of Additionally, India's weight in attracting approximately rebound to 0.3 per cent in

Q1 2024 as against the
10 per cent by March 2025.
US$2 billion in investments
the MSCI Global Standard
contraction of 0.2 per cent in
inclusion in
Index, which tracks emerging
into India.
Consequently, India will share
the previous quarter. The UK
stock markets, has reached
equivalent weight with
Trends Global Bond countries like China, Indonesia, another record high and is Furthermore, India’s Among the major economies, economy continues to face
tepid household consumption,
inclusion in these global
and Mexico. India’s inclusion is
anticipated to rise from the
Indices
business investment, exports
bond indices would also
current 18.2 per cent to 19
likely to redistribute weights
contribute to lower 10-year
within the J.P. Morgan
per cent. This adjustment will
and imports.
than the previous three years.
India's inclusion of sovereign Emerging Market Bond Index, narrow the gap with China, bond yields due to the pace of growth is slower Japan, which had been posting
participation of wider set of
whose weight is expected to
potentially reducing the shares
bonds in global indices such of Thailand, Poland, and the decrease slightly from 25.4 per investors in the global The US economy slowed to a robust growth in the
as the J.P. Morgan Bond Index Czech Republic over the next cent to 25 per cent during the market. 2.9 per cent in Q1 2024 as previous quarters, contracted
starting June 2024 and 10 months. same period, potentially compared to 3.1 per cent in 0.2 per cent in Q1 2024. The
Bloomberg Index from the previous quarter. The economy was squeezed by
n recent years, the world 2024, supported by a rebound growth projections for the in 2024 and 3.2 percent in 2025. January 2025 marks a slowdown primarily reflected weaker consumption and
Ihas gone through multiple in global trade as well as an current year. Concurrently, the International significant milestone. It 10-year Bond Yield (%) slower growth in consumer external demand, thereby
crises which has added to the anticipated soft landing in Monetary Fund (IMF), too, in its reflects heightened 7.200 4.700 spending, exports as well as throwing a fresh challenge to
long list of existing flashpoints. advanced economies. The In its latest Global Economic World Economic Outlook confidence and interest 7.150 4.600 state and local government
Despite these challenges, the optimism in the global Prospects (GEP) in June, the released in July, projects the among foreign investors in spending. The employment the policymakers.
global economic activity is economy is also reflected in World Bank revised upwards global economy to grow at 3.2 India's growth trajectory. The 7.100 4.500 rate in the US also rose to a
rebalancing and is expected many of the multilateral the global growth projections by per cent in 2024 and a tad move is expected to lower 7.050 4.400 On the other hand, the
to grow at a stable pace in organisations upgrading their 20 basis points to 3.1 per cent higher at 3.3 per cent in 2025. the cost of capital by high of 4.3 per cent in July, the Chinese economy advanced
attracting additional 7.000 4.300 highest since October 2021. 5.3 per cent in Q1 2024,
investment, thereby 6.950 4.200 Meanwhile, the labour force marking the steepest
supporting the country's participation rate edged expansion since Q2 2023,
Global Growth Forecasts (y-o-y%)
financing requirements and 6.900 4.100 higher to 62.7 per cent in July lifted by continued support
$GYDQFHG (FRQRPLHV 8QLWHG 6WDWHV Euro Area Japan (PHUJLQJ 'HYHORSLQJ (FRQRPLHV China India World boosting private sector 6.850 4.000 from 62.6 per cent in June. measures from Beijing and
investments.
2023 1.7 2.5 0.5 1.9 4.4 5.2 8.2 3.3 6.800 3.900 Eurozone, which was largely spending related to the Lunar
2024 (F) 1.7 2.6 0.9 0.7 4.3 5.0 7.0 3.2 On 28th June 2024, India affected by the global turmoil, New Year festival. In the first
2025 (F) 1.8 1.9 1.5 1.0 4.3 4.5 6.5 3.3 officially joined J.P. Morgan's 02-05-2024 09-05-2024 16-05-2024 23-05-2024 30-05-2024 06-06-2024 13-06-2024 20-06-2024 27-06-2024 04-07-2024 11-07-2024 18-07-2024 25-07-2024 showed some resilience by three months of the year,
Government Bond Index – China’s fixed investment also
Note: F is Forecasts rising to 0.4 per cent in Q1
Source: IMF World Economic Outlook, July 2024 Emerging Markets, initially India US (rhs) grew by 4.5 per cent, the
with a one per cent weight. Source: Investing.com 2024. UK’s growth marked a most in nearly a year.
This weight is set to increase
The table above indicates increasing its share of global business stood at 53.1 in June June 2024, oil prices
expectations of a gradual GDP from 16 per cent to 18 underpinned by rising intakes reached US$82.2 per barrel, gradually, rising by one
stabilization in advanced per cent over the next five of new work, including down from the average of percentage point monthly In terms of outflows, FDI Conversely, outward
economies, with growth years. modest growth of new US$89.9 per barrel in April flows from the developed investment from European
standing at 1.7 per cent in export business. The J.P 2024, potentially influenced nations increased by 4 per countries fell by 11 per cent,
2023 and 2024 and rising Steady growth in the world Morgan Manufacturing PMI by oversupply and low cent to US$1.1 trillion in with notable decreases
marginally to 1.8 per cent in economy is underscored by stood at 50.9 in June, demand post the OPEC+ Global billion, while flows to economies, US, India and UK Notably, investments are 2023. The United States and observed in Germany, Sweden
2025. Conversely, growth in recent robust performance in remaining above the 50.0 policy decisions to extend developed economies fell by also appear in the top five increasing in sectors like Japan emerged as the leading and Spain, which are major
emerging markets and various high-frequency mark for five months in a row. deep cuts in oil production Investment 15 per cent. destinations for both automotive and electronics, sources of outward sources of outward
developing economies is indicators, which expanded at to the end of 2025. The greenfield projects as well as particularly in regions with investment, with both investment.
expected to maintain a steady a solid pace at the end of the trajectory of crude oil Flows FDI inflows declined for most international project finance access to major markets. countries seeing significant Further, FDI outflows from
pace with year-on-year second quarter. The J.P BRENT CRUDE prices continues to remain reporting economies. About deals. However, many developing increases. Outward FDI from developing countries slowed
growth holding at 4.3 per Morgan Global Composite PRICES MODERATING contingent on the evolving two thirds of developed countries continue to face US increased by 10 per cent by 11 per cent to US$491
cent in 2024 and 2025. PMI stood at 52.9 in June, a BUT REMAINING global scenario and any Global foreign direct economies saw declines and Looking ahead to 2024, while difficulties in attracting foreign and by 14 per cent from billion in 2023. This decline
bit lower than 12-month high ABOVE US$80 MARK frequent cuts announced by investment (FDI) fell by 2.0 about half of the developing challenges persist, there is investment and integrating Japan, going against the overall was widespread across most
Asia is poised to contribute of 53.7 in May. However, rates IN 2024 the OPEC+. Moreover, the per cent to US$1.3 trillion in ones. US continued to remain potential for modest growth into global production trend for developed regions, although South-East
significantly to global growth, of increase in output and new developments in the recent 2023, influenced by economic the largest FDI recipient, driven by improved financial networks, underscoring countries. Asia experienced a continued
led by India and China, which business remained close to Red Sea crisis are also to be slowdowns and geopolitical accounting for almost a conditions and efforts to ongoing disparities in global growth in outward
are expected to play pivotal the 12-month high registered Global commodity prices looked out for, given that it tensions. Inflows into quarter of global flows. China facilitate investment through economic participation. investment.
roles. India is projected to in May and jobs growth exhibited a mixed trend, with serves as a crucial route developing countries, accounted for another ~12 national policies and
sustain its momentum as a accelerated to its fastest pace Brent crude prices for nearly 10 per cent of previously robust, declined by per cent. Among the top international agreements.
key driver of global economic since June 2023. Similarly, the moderating but remaining world’s oil. 7.0 per cent to US$867
expansion, potentially growth of service sector above US$80 mark in 2024. In

26 ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 27
QUARTERLY JOURNAL OF ECONOMICS
QUARTERLY JOURNAL OF ECONOMICS
AUGUST 2024 AUGUST 2024