Chinese News Feed

India's economy has plummeted and growth scams are being uncovered. Rodgers: they do not understand the economy at all.

bwchinesewx @ 2019/11/09

According to statistics released by the India Statistical Bureau, India's economic growth was 5.8% in the 1-3 months of 2019, when it was the lowest level in nearly 5 years. In 2019 4-6, the real growth rate of India increased by 5%, the slowest since 2013, compared with the same period last year, when the economic growth was 8%. With the continuous collapse of India's economic growth, the divestment of international capital and the sale of assets of India's local banks, India's economic plan, once known as a new world factory, is now difficult to sustain.

In the short term, investors and entrepreneurs around the world turned India into a place where money and technology were withdrawn. At the same time, the international rating agencies are no longer optimistic about India's economy and downgraded India's rating, which is just like salt for the growth of the India economy. The latest development is that according to the US media 8 CNBC11 report, Moodie, a rating agency, downgraded India's outlook from "stability" to "negative".

In his report, Moodie pointed out that the risk of India's economic growth will continue to decline sharply. The reason for this reduction is that the country's economic growth will continue to be "substantially lower than the past". Moodie believes that the root cause of India's economic collapse is that the high burden is still increasing.

The Moodie report said that the prospect of effective implementation of economic reform has weakened since the India sovereign rating was raised in 2017. India's federal data show that net income tax in India as at 9 this year is the lowest in the past five years, and the lower tax revenue may cause pressure on India's fiscal deficit target (3.3% of GDP), because the India government intends to spend some financial measures to stimulate the economy.

Radhika Rao, an economist at DBS group in Singapore, believes that changes in India's economic outlook reflect concerns about the country's growth and "expected fiscal decline" in Radhika Rao. Although the Central Bank of India has lowered interest rates by 135 basis points so far in 2019 and said it would further relax interest rates, Moodie predicted that India's economic slowdown would be persistent.

This further confirms the long-term adherence of the observer group of BWC Chinese network. India's high economic growth is not sustainable. At present, the risk of India's economy falling into the dollar shortage and debt crisis is increasing due to the lack of a broad foreign exchange reserve moat. You know, in recent years, the more obvious index growth of India's economy has been accumulated by huge dollar debts. In other words, the Ponzi scheme, which has been hidden in India's economy, is being uncovered.

We inquired about the financial data published in India, and found that India's debt has been increasing since 2003. After the QE began to start in 2008, the speed of India's borrowing from foreign countries (mainly to the US) suddenly accelerated. Indian central bank data show that by the end of 2018, India's public debt had reached about $1 trillion and 190 billion, but India's external savings account for only about $401 billion 776 million, and its US debt was only $162 billion 200 million. When the low foreign reserves were exposed to high external debt and the situation continued to expand, the fragile mode of India's economy would not be sustainable sooner or later.

The Economist magazine has reported that India's economy is in the most urgent situation in 25 years. The core sticking point of India's economy is that India's economy is in the US dollar debt trap and wants to exchange interests with the Wall Street group. While India elephant is in charge of "bloodthirsty shark", domestic banks are carrying up to 20% of bad debts. In other words, dollar capitals are aimed at profit seeking, and when profits turn to a certain level, the spread of wealth is bound to be harvested. The beneficiaries of this wealth are often the providers of US dollar capital, and India itself may have to pay high interest rates for this purpose, but has not really benefited from the high growth index. This further explains why India's economy has fallen sharply in the past.

At the same time, global capital has also been evacuated from India and reduced investment in India. For example, according to CNN, in 2015, anyone who had serious thoughts about iron start-ups could get 1 million 500 thousand to 3 million dollars worth of potential investors. By 2017, valuations of similar ideas had dropped by more than 50%. Meanwhile, the early financing of start-ups in India dropped by 37% in the third quarter of 2017.

To add insult to injury, India fairy tale needs to face a more serious fact that many local banks in India began to sell assets two years ago. Bank of India and IDBI Bank of India have already sold their assets, in order to deal with high debts and serious non-performing loans. At the same time, some banks in India have already developed their own financing schemes. This is also an important signal of India's economic fairy tale shattered.

According to data from Venture Intelligence, in 2015, the scale of financing for India start-up companies reached its peak, when the new company received nearly $6 billion in investment. According to data from industry organization Nasscom, India is the third largest entrepreneurial center in the world. However, as investors tighten their pockets and demand higher investment returns, entrepreneurs in India, mainly young male engineering graduates or students who drop out of school, are gradually returning from their ideal to reality.

The spring river heating duck prophet, obviously, has the keen investment sense of smell international capital has already left India early, the analyst has told us that the India economic fairy tale is already awakening, India enters the financing cold spell period. We know that in recent years, India's economic note has been trying to make itself a real "world factory". The above signs indicate that India's economic plan still has a long way to go. Once it is completed, the fairy tales will eventually burst, such as weak infrastructure, poor external reserves, international capital and international investors' credit. India's economic problems remain unsolved, and those entrepreneurs who dream of making fortunes in India's economic fairy tales are awakening at this time.

Madhavi Arora, chief economist of Edelweiss Securities in Mumbai, says India's economy seems to have lost kinetic energy. Wall Street commodity king and billionaire Jim Rogers recently issued a new order to "snipe the India economy" to the market again. Rodgers said in a telephone interview with Singapore media. "Before May 2014, I invested in India, I owned India stock, but I sold India shares in a few weeks. Since then, I have no investment in India.

In an interview with local media in India, Rodgers criticized India's economic departments and central banks for their successive mistakes in the face of rising debt and trade imbalance. India's debt to GDP ratio has not risen, and the fiscal deficit is also worrying. Rodgers has almost spoken of the reasons why India's economic growth scam is being unravel, saying that they do not understand the economy at all. (end)