Largest Emerging Economies, E7+Pakistan, growth prospects and challenges

[Shardul.....the lion]

Wow, Indian economy is 34% larger than 2007, thats huge.

Good thread hello_10.

 

[Hello_10]

Wow, Indian economy is 34% larger than 2007, thats huge.

Good thread hello_10.

also it was till the end of 2011, as this is an article in January 2012, and looks obvious also. as, if India had around 7.4% growth in 2008, 6.6% in 2009, 10.1% in 2010 and 7.2% in 2011 then overall cumulative growth for the four years of 2008 to 2011, at around 34%, is obvious

 

[Hello_10]

its something like, if growth rate of India comes around 5.7% for this 2012, as expected, due to global cues then the calculation will be something like as below:

while considering India GDP to be 34.6% higher by 2011 than 2007 level, = 134.6*1.057 = 142.3%, or around 42.3% higher than its 2007 level, adjusting inflation, after 5 year to end 2012. while we find major EU's economies of G7s having -ve growth this year

=> also, we have new GDP Per Capita on PPP calculation for India considering the year 2012 at 5.7% growth, as below:

we find India now has around 350mil Upper Middle Class, more than total population in 1947, whose per capita income on PPP is similar to the Very High HDI countries like Argentina, Poland, Saudi Arabia etc. one day I calculated as below:-

first, we find GDP on PPP of India was $4.45tn in 2011 but its still manipulated by the US/UK since 2007. as, till 2006, we had a different way of measuring GDP on PPP which used to include estimated undocumented part of GDP also. and I remember, this way GDP of high population 'developing' countries was around 50% to 80% higher, and for the middle order countries like Brazil/Turkey it was around 10% higher. and for the developed nations, the difference was hardly around 1% to 3% by that "Old Method" which was in application till 2006. like as below:

"There are, however, practical difficulties in deriving GDP at PPP, and we now have two different estimates of the PPP conversion factor for 2005, India's GDP at PPP is estimated at $ 5.16 trillion or $ 3.19 trillion depending on whether the old or new conversion factor is used," it said.

It's official: India's a trillion-$ economy - Times Of India

means, GDP of India on PPP was already $5.16tn in 2006. again we have India's growth rate since 2007 as below:

India GDP Annual Growth Rate

here we find, "Average Growth Rate" of India from first quarter 2007 till december qurater 2012, stood at around 7.7%, on 'annual' basis, considering GDP growth for the year 2012 around 5.7% only, as estimated. hence considering GDP on PPP of India at $5.16tn in 2006 by Old Method, we may calculate its value by 2012, after 6 years since early 2007, as below:

GDP on PPP of India by end 2012 = 5.16*1.077*1.077*1.077*1.077*1.077*1.077= $8.053tn

but we would also get to know that PPP value consider value of goods and serivces in US$ term, means we would include the factor of inflation of United States also. and if we consider average 1.5% inflation of US for those six year in between early 2007 to 2012, with considering an overall factor of just 1.10 this way, then GDP on PPP of India comes around = 8.053* 1.1= $8.86tn by 2012. and it still hasn't included 'Value Added' effects also........

again, we know that share of agriculture was around 17% in India's GDP in 2012. therefore, we find share of agriculture in indian economy, 0.17 * 8.86= $1.506 trillions, on which 50% population of india is dependent. means around 600mil people based on agriculture in india have per capita income around = $2,500 on PPP by 2012, which is itself similar to the lower middle order countries.

this way, 8.858 - 1.50 = $7.36tn is left for rest of 600mil people based in industry and service in India, with per capita income of around $12,366 on PPP which is higher than Brazil..........

again, we have news that 25% of the population of cities are either in slum or in bit better condition only. so we would consider per capita income of 300mil living in cities in low condition at hardly $3,000 which takes a share of $900bil from its GDP. hence we are then left with around 7.36 - 0.90 = $6.46tn, around, for rest of 300 mil people living in cities, the so called Middle Class of India with per capita income around $21,533 on PPP this way.

but it is estimated that out of total 600mil people based in agriculture sector, it also has around 50mil Lower Middle Class with Per Capita Income around $12,000 on PPP. (as we know that agriculture has higher share of 'undocumented' part, with that, Agriculture also has higher share of non-taxable business of India.) so we find total middle class of India around 350mil with per capita income around $20,000 on PPP which is similar to Very High HDI countries like Argentina, Poland, Saudi Arabia etc, and more than total population of India at the time of freedom in 1947

 

[Hello_10]

2013 Global Manufacturing Competitiveness Index
November 16, 2012

The U.S., the world’s largest economy, will slip to fifth place from third in manufacturing competitiveness in the next five years as India and Brazil race ahead, according to a report.

China will remain in the top spot while India rises to second from fourth and Brazil jumps from eighth to third, according to the 2013 Global Manufacturing Competitiveness Index compiled by Deloitte Touche Tohmatsu and the U.S. Council on Competitiveness. The index, which was first introduced in 2010, reflects perceptions of more than 550 senior corporate leaders surveyed about how 38 countries rank currently and will fare in five years.

Executives said access to talented workers is the top indicator of competitiveness, followed by a country’s trade, financial and tax policies, according to the report, which was to be published today.

“From a U.S. perspective we didn’t change that much, but it’s just that others are moving rapidly,” Samuel Allen, chairman and chief executive officer of Deere & Co. (DE) and chairman of the council, said in a telephone interview. “We can’t tread water whether it be in education, tax reform or continued investment in infrastructure.”

The current and future rankings reinforce the perception that the U.S. is “living off of investments we made a long time ago,” Allen said. He said he worries about factors such as deteriorating U.S. infrastructure that may increase costs to move goods, and energy policies that could boost fuel prices.

‘Continued Deterioration’

While Deere, the world’s largest (DE) maker of farm equipment, has factories around the world, it still has invested about 57 percent of its capital in the U.S. in the last five years, Allen said. The Moline, Illinois-based manufacturer generated 61 percent of its revenue (DE) in the U.S. and Canada last year, according to data compiled by Bloomberg.

“What you worry about is the continued deterioration of the critical success factors to manufacture here,” Allen said.

The U.S. still can improve its competitiveness by reforming its tax structure and controlling its debt, Allen said.

According to the report, Germany will move from second to fourth in the competitiveness ranking, South Korea will fall from fifth to sixth, Taiwan will go from sixth to seventh, Canada will drop from seventh to eighth, and Japan falls out of the top 10 list altogether, tumbling from 10th to 12th. Vietnam, meanwhile, will jump from 18th to 10th and Singapore will maintain its No. 9 ranking.

‘Sobering’ Findings

Another “sobering” finding in the report is that in five years Germany will be the only European country in the top 15 spots for manufacturing competitiveness, as the U.K. and Poland slide, Allen said.

The world is seeing a “power shift” of competitiveness toward developing countries, particularly those in Asia, said Deborah L. Wince-Smith, CEO of the Washington-based council that includes business, academic and labor leaders.

China and other emerging countries are increasingly manufacturing advanced goods, said Craig Giffi, the U.S. consumer and industrial products industry leader at Deloitte who co-authored the report.

While emerging manufacturing powers still face challenges in improving their infrastructure, supplier networks and legal systems, the countries are investing to drive growth and jobs, according to the report.

“We are at an inflection point,” Giffi said. “For developed nations, it’s going to get harder.”

Aside from the responses of top executives, the study was based on interviews with “key manufacturing players” and contributors from Deloitte, the council, the Indian Institute of Management in Lucknow, and Clemson University in South Carolina, according to the report.

U.S. Competitiveness Slips as India Jumps in Five Years - Businessweek

India is likely to emerge as the second most competitive economy in the world after China in terms of manufacturing in the next five years, says a report.

According to the 2013 Global Manufacturing Competitiveness Index compiled by Deloitte Touche Tohmatsu and the US Council on Competitiveness, five years from now, emerging economies would surge to occupy the top three spots.

The five developed economy nations that were ranked in the top 10 on Friday include -- Germany (2nd), the US (3rd), South Korea (fifth), Canada (seventh) and Japan (tenth), while five emerging economy nations were also ranked in the top 10 on Friday: China (first), India (fourth), Taiwan (sixth), Brazil (eighth), and Singapore (ninth).

India may emerge as 2nd most competitive manufacturing economy

 

[Hello_10]

Brazil spending vast amounts on infrastructure
Aug 14, 2012 9:34 AM

Brazil estimates that it must spend $110 billion per year over the next five years to meet its infrastructure needs.

Brazil spending vast amounts on infrastructure | Canadian Consulting Engineer

Brazil is ramping up its infrastructure spending as the country prepares to host the 2014 World Cup and 2016 Summer Olympics. Last year, the government announced a $900 billion investment program over the 2011-2014 period to improve its roads, railways, and ports. Part of that multiyear commitment is a $19 billion-plan to build a high-speed rail that will connect Rio de Janeiro and São Paulo.

CHARTS: The Alarming Collapse Of US Infrastructure Spending - Business Insider

Russia makes huge investment

An ambitious programme in Russia to remake or modernise the crumbling Soviet-era roads, railways, bridges and ports is under way.

Between $60bn (£39bn) and $65bn (£42bn) is being invested each year on major renovation projects across the country – not that you’d notice if you visit Russia’s regional capitals, which still look drab and run-down, bar a few brightly coloured billboards. That’s because most of the money is going into transport and power systems – the lifeblood of this vast but largely empty country.

Infrastructure investment in Russia in 2010 reached $111bn (£72bn), according to a report by Morgan Stanley, a 10-fold increase from the $7bn spent in 1999.

Commentators regularly attack the Kremlin’s “spending frenzy”, claiming it has driven up the oil price needed to balance the budget to over $125 a barrel – from $21 in 2007, based on Citigroup figures.

But they don’t seem to acknowledge that, rather than propping up struggling factories or paying public servants, the money is going on much-needed infrastructure projects.

And, when set against the rapidly expanding economy, the spending splurge is not that much: as a share of GDP it has doubled from 3.5pc of GDP in 1999 to 7pc in 2010 – slightly ahead of India’s 6pc, but well behind China’s 11pc.

What’s more, it isn’t just the federal government making the investment, but state-owned companies, many of which are now on the privatisation list. Over half of all infrastructure investment (3.7pc of GDP) was made by just eight large state-owned companies, while federal budget spending accounted for only 1.8pc, according to Morgan Stanley.

The real boom in infrastructure spending, though, has not even begun. A host of mega-projects are being prepared that will push the spending even higher over the next couple of years.

Among the biggest projects planned are the development of the Vankor oil and gas field, the biggest find in Russia in the past 25 years; the Ust-Luga port in the Gulf of Finland that will be the biggest warm-water port in Russia; the reconstruction of the Black Sea resort of Sochi ahead of the 2014 Winter Olympics; and the construction of the East Siberia-Pacific Ocean (Espo) oil pipeline.

Morgan Stanley estimates that a total of $500bn worth of infrastructure projects are underway or about to start.

“Based on our major projects database, we see a steady $60bn-$65bn [per year] flow of infrastructure capital expenditure on major projects, and a new generation of mega-projects under development, including high- speed rail, new federal highways, the Moscow transport hub and further development of the Yamal oil and gas province,” says Jacob Nell, chief economist of Morgan Stanley and author of the report.

To sustain this high level of development, Mr Nell estimates state-owned companies will have to raise another $28bn a year to finance the work – about as much as Russia attracts in foreign 
direct investment.

What is odd is that much of this work has gone unnoticed. This is partly because the spending has not had much impact on the country’s growth or overall investment – both are now lower than before the financial crisis began. And because the more opaque state-owned companies are in the front line, their spending is harder to see than federal budget spending or privately funded investment.

But perhaps the biggest factor is that, unlike China and India, which were both largely agrarian economies, Russia inherited a lot of serviceable infrastructure from the Soviet era. In the boom years of the Seventies, when the workers’ paradise looked like it might actually happen, Kremlin spending on infrastructure averaged 40pc of GDP a year. It was only in the Nineties that it fell away to next to nothing.

“Russia inherited significant elements of a modern industrial infrastructure from the Soviet Union, including an oil and gas industry, a mining industry, a railway network, a power network, and urban transport and municipal services. However, the infrastructure was often inefficient, and there were notable gaps, particularly in telecommunications and transport,” says Mr Nell.

Russia makes huge investment in transport networks - Telegraph

 

[Hello_10]

BRIC's 'Annual' Growth Rate for Q1, Q2, Q3 of 2012:

=> Brazil:- Q1: 0.8%, Q2: 0.5% and Q3: 0.9%
Brazil GDP Annual Growth Rate

=> Russia:- Q1: 4.9%, Q2: 4.0%, Q3: 2.9%
Russia GDP Annual Growth Rate

=> India:- Q1: 5.3%, Q2: 5.5%, Q3: 5.3%
India GDP Annual Growth Rate

=> China:- Q1: 8.1%, Q2: 7.6%, Q3: 7.4%
China GDP Annual Growth Rate

 

[Hello_10]

BRIC's Growth Rate for the last 3 years is as below, as reported by CIA Fact Book:

=> Brazil:- 2.7% (2011 est.)
7.5% (2010 est.)
-0.3% (2009 est.)
https://www.cia.gov/library/publications/the-world-factbook/geos/br.html

=> Russia:- 4.3% (2011 est.)
4.3% (2010 est.)
https://www.cia.gov/library/publications/the-world-factbook/geos/rs.html

=> India:- 6.8% (2011 est.)
10.1% (2010 est.)
5.9% (2009 est.)
https://www.cia.gov/library/publications/the-world-factbook/geos/in.html

=> China:- 9.2% (2011 est.)
10.4% (2010 est.)
9.2% (2009 est.)
https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html