RaboResearch - Economic Research

Economic Report

Should India Print Money To Fight Covid-19?

Against the backdrop of a crippled economy and rising debt metrics, policymakers around the globe are adopting or considering unconventional monetary policy to solve the current state of emergency. For some countries, such as India, this would be a bad idea. We show that a major MMT fiscal package could push inflation up to 12% and the currency down by 25%.

Economic Report

India: Twin crises bode ill for the economic outlook

Besides the border dispute with China, India continues to struggle to keep a lid on COVID-19. The twin crises has an adverse impact on India’s attractiveness as an investment destination, which might explain why the Indian rupee (INR) has barely been able to benefit from the global financial markets rally.

Economic Report

Which jobs are vulnerable in the six-foot economy?

The United States might be stuck with a so-called ‘six-foot economy’ for a considerable period of time in order to prevent a re-emergence of the COVID-19 virus. Our main finding is that 23% of all US jobs might face problems to adapt to such an economy. Occupations in healthcare (60% vulnerable jobs), air transport (59%) and the hospitality sector (49%) are especially vulnerable.

Economic Report

The shape of India’s exit from the COVID-19 crisis

We expect the COVID-19 crisis to cost each Indian between INR 8,000 to 16,000 in 2025 of missed economic growth compared to a benchmark scenario of no pandemic, depending on the shape of the recovery. However, if the USD 270bn recent stimulus package addresses India’s structural weakness and is properly executed, India’s economy could even emerge stronger from the COVID-19 crisis.

Economic Comment

India: Extended lockdown causes further economic distress

Due to the extended lockdown until 3 May, we have revised our economic outlook and expect the Indian economy to contract by 8.7% in Q2 and the fiscal year 2020/21 to arrive at 1.2%. We also expect the RBI to cut policy rates by another 90 basis points in June, and it might initiate a cap on the reverse repo window or even adopt debt monetization.

Economic Comment

India: COVID-19 impact revisited

We expect a sharp decline of the Indian economy in the second quarter of 2020 of -5.7% (y-o-y) due to the three-week lockdown and adverse trade effects. For calendar 2020 as a whole, we now expect growth at around 1.3% and for 2021 we expect a sharp rebound of 7.6%.