Economic Round-Up: Financial Highlights Across Top Emerging Nations This Week

By Malvika Gurung

Investing.com -- The ongoing week is crammed with multiple economic developments globally. 

There is fresh geopolitical tension stemming between the US and China on US House Speaker Nancy Pelosi’s trip to Taipei despite warnings from Beijing, the Bank of England hiking interest rates to the highest in 27 years while warning of a long recession, and the Reserve Bank of India’s bi-monthly monetary policy meeting outcome on Friday.

Listed below are highlights of key financial events and developments that occurred during the week across the top three emerging nations - India, China, and Indonesia.

India:

• The RBI Monetary Policy Committee hiked the repo rate by 50 basis points to 5.4% on Friday, taking the benchmark lending rate to pre-pandemic levels, up 140 bps since May 2022, while maintaining its Withdrawal of Accommodation stance.
• The RBI committee has retained its real GDP growth forecast for FY23 at 7.2%, along with the retail inflation projection at 6.7%.
• The central bank estimates the CPI inflation to exceed the upper tolerance level of 6% in the upcoming quarter too.
• India’s services sector PMI hit a four-month low in July 2022 at 55.5 compared to 59.2 in the previous month, on account of mounting inflation, demand curtailment by competitive pressures, and unfavorable weather.
• The country’s merchandise trade deficit jumped to $31.02 billion in July 2022 from $26.18 billion in June, led by elevated commodity prices and a depreciating rupee against the US dollar.
• Indian equity benchmark indices Nifty50 and Sensex climbed marginally on RBI’s policy outcome on Friday, ending the week on a positive note.

China:

• The second largest economy launched ballistic missiles and conducted military drills in waters around Taiwan on Friday amid escalating tensions between US and China on US House Speaker Nancy Pelosi’s trip to Taipei despite warnings from Beijing.
• China has suspended the trade imports of some fruits and fish from Taiwan and the export of natural sand to the self-governing island, in apparent retribution. China is Taiwan’s largest trading partner.
• The International Monetary Fund has slashed China’s economic growth projection to 3.3% for 2022, the lowest in 40 years, due to the impact of continuing Covid-19 lockdowns.
• The country’s factory activity depicted by the official manufacturing PMI shrank to 49 in July 2022 from 50.2 in June, missing the Street’s estimate, with the steepest contraction resulting from the energy-intensive industries.
• The Chinese steel sector PMI dropped 3.2 percentage points to 33% in July on a sequential basis. According to a market expert, nearly 75% of the country’s steel mills could collapse into bankruptcy amid a worsening property crisis.
• China’s benchmark index Shanghai Composite gained 1.19% and Hong Kong’s Hang Seng index ended higher on Friday amid easing concerns of China’s military drills around Taiwan.

Indonesia:

• The Southeast Asian country’s economic growth accelerated in the second quarter, as GDP grew 5.44% from a year ago, marking the fastest increase in four quarters and exceeding the market’s estimates.
• Indonesia's inflation ran to a seven-year high at 4.94% in July 2022, the highest rate since Oct 2015, led by soaring food prices, fuel, and airfare, and electricity tariff hikes.
• The government put a temporary ban on eight major websites, including Yahoo and PayPal (NASDAQ:PYPL), on failure to register for licensing, in line with the country’s restrictive laws regulating online activity.
• Benchmark equity index IDX Composite closed the week 0.4% higher.