The global economy showed positive signals in October with notable improvements in the US, Japan, and India. Key economic indicators provide insight into market trends and future growth expectations.

The US trade deficit narrowed to USD 70.4 billion in August 2024, marking the lowest level in five months. This improvement follows an upwardly revised trade deficit of USD 78.9 billion in July. The reduction in the deficit suggests a boost in exports or a decrease in imports, contributing to a healthier balance of trade for the US economy. As the global trade environment stabilizes, this trend could further support the recovery of the US economy.

In another positive sign for the US, the TIPP Economic Optimism Index increased by 0.8 points to 46.9 in October 2024. This marks the highest level since April 2023, just shy of market expectations of 47.2. The rise in economic optimism reflects growing consumer and investor confidence, even as inflationary pressures and interest rate concerns persist.

Japan’s Reuters Tankan sentiment index for manufacturers showed a marked improvement in October, rising to 7 from 4 in September. The rise indicates growing business confidence among Japanese manufacturers, which is a positive sign for Japan’s economy. However, concerns about the strength of China’s economic recovery continue to cloud the outlook, particularly for export-driven sectors.

In India, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 6.5%, while shifting its policy stance to “neutral” from “withdrawal of accommodation.” This move signals the central bank’s balanced approach towards managing inflation while supporting growth.

The RBI also reaffirmed its projections for FY25, maintaining its forecast for real GDP growth at 7.2% and CPI inflation at 4.5%. The steady outlook reflects confidence in India’s economic resilience amid global uncertainties.

International Monetary Fund (IMF) Executive Director KV Subramanian has urged Indian states to play an active role in implementing economic reforms to help India achieve its ambitious target of becoming a USD 55 trillion economy by 2047. This call emphasizes the importance of coordinated efforts across both national and state levels to drive growth and development.

The global economic landscape is showing signs of resilience as the US trade deficit narrows, optimism rises, and Japan’s business sentiment improves. In India, the RBI’s steady stance on interest rates and positive growth projections further highlight the country’s economic strength. However, challenges such as China’s economic recovery and inflation risks remain key factors to watch moving forward.

China’s National Development and Reform Commission (NDRC) disappointed global investors on October 8 by withholding major new stimulus measures, despite expressing confidence in achieving the country’s economic growth target for the year. The state planner’s announcement, which outlined a roadmap for economic recovery but lacked fresh large-scale stimulus initiatives, triggered a sell-off in metal stocks, both in China and India.

Indian metal companies, including NMDC, NALCO, Tata Steel, and JSW Steel, saw their shares drop between 3-5 percent in response to the NDRC’s update. The lack of substantial new stimulus initiatives from China dashed investor hopes, as the country’s recent fiscal measures had raised expectations for further economic support. Additionally, a sharp decline in SGX iron ore prices further exacerbated the negative sentiment, pushing down the stock prices of key steel manufacturers.

The highly anticipated press briefing by China’s NDRC left investors underwhelmed, despite the commission’s confidence in hitting its economic growth target of around 5 percent for 2024. While previous actions had fueled expectations of additional fiscal stimulus worth trillions of yuan, doubts remain about the country’s ability to sustain long-term growth without more aggressive intervention.

Investors had been looking for significant stimulus measures to restore confidence in the face of sluggish consumer spending, a prolonged property sector downturn, and rising trade tensions. These challenges are pressuring new growth areas, such as electric vehicle exports, and raising concerns about whether China can maintain its status as a global growth engine.

China, the world’s largest importer of metals, plays a crucial role in driving global demand for commodities like iron ore and steel. The combination of internal economic challenges and the NDRC’s reluctance to introduce major stimulus is casting doubt on the strength of China’s metal consumption in the near future. As a result, metal companies, particularly those that rely on exports to China, are feeling the strain of the slowdown.

The lack of decisive action by China’s policymakers may signal that the economic revival investors were hoping for could take longer to materialize, which could lead to continued weak demand for metals. This uncertainty is further souring market sentiment, not only in China but also in other economies tied to the global metal supply chain, including India.

While China’s NDRC has expressed confidence in meeting its 5 percent economic growth target for the year, the absence of major stimulus measures is casting doubt on the country’s ability to drive a robust recovery. For metal companies, both in China and abroad, the lack of new economic fuel is creating uncertainty around future demand, leading to significant market losses. Investors will be closely watching for any further developments that could indicate whether China’s economic rebound will gain traction or continue to stall, keeping pressure on global metal markets.

In recent global economic developments, data from Japan, China, and India reveal shifting dynamics in employment, manufacturing, and debt ratios, providing critical insights into the financial outlook for these regions.

Japan’s unemployment rate dropped to 2.5% in August 2024, down from July’s 11-month peak of 2.7%, beating market expectations of 2.6%. This positive trend highlights a recovering labor market, driven by stable industrial output and demand in key sectors. The decline suggests that Japan is gradually overcoming the employment challenges posed by earlier economic disruptions, with a steady recovery trajectory in the labor market.

In China, the Caixin China General Manufacturing PMI fell to 49.3 in September, down from 50.4 in August. This figure missed the market forecast of 50.5, signaling a contraction in the manufacturing sector, as the PMI slipped below the 50-mark, which separates growth from contraction. The drop indicates the lowest level since July 2023, pointing to weakened demand and production in China’s manufacturing sector, which could impact global supply chains and economic growth.

In Japan, the Bank of Japan’s index for big manufacturers’ sentiment held steady at 13 in Q3 of 2024, matching market forecasts. This marks the second consecutive period of stability in sentiment, indicating cautious optimism among large manufacturers. While the sentiment index remains positive, manufacturers are likely weighing global uncertainties, including supply chain disruptions and fluctuating demand in key export markets.

India saw a slight improvement in its debt metrics, with external debt as a proportion of GDP declining to 18.8% by the end of June 2024, from 18.9% at the end of March 2024. This marginal decrease suggests improved debt management and a strong economic foundation, as the government continues to implement measures to control external borrowing and maintain financial stability.

India also reported a current account deficit of USD 9.7 billion for the quarter ending June 2024, amounting to 1.1% of GDP. This marks a widening of the deficit, driven by a rise in imports and relatively slower export growth. However, the manageable deficit level suggests that India remains on a stable economic footing, with room for improvement in balancing trade and financial flows.
India’s index of eight core industries recorded a 1.8% year-on-year decline in August 2024, following a 6.1% rise in July. The contraction reflects weaker performance in critical sectors such as coal, electricity, and steel, which may affect overall industrial output in the coming months. However, this decline could be temporary, with potential for recovery as infrastructure and industrial investments gain momentum.

These developments across Japan, China, and India highlight the varying economic trends in the Asia-Pacific region. While Japan shows promising signs of labor market recovery, China’s manufacturing sector faces challenges, and India continues to navigate its external debt and industrial performance.

Inflation is the sustained increase in the general price level of goods and services over time. It is caused by factors such as increased demand, higher production costs, and expectations of future price increases. It can have both positive and negative effects on the economy, requiring measures to manage and maintain price stability.

The acceptable level of inflation differs among countries and depends on factors like economic conditions, monetary policy objectives, and government goals. There is no universally applicable percentage. Generally, central banks and governments strive to maintain a stable inflation rate within a targeted range.

Developed economies often aim for around 2% inflation as desirable. However, developing countries or those with unique circumstances may have different inflation targets. It is crucial for each country to evaluate its economic situation and establish an inflation target that encourages price stability and fosters sustainable economic growth.

As per the ‘World of Statistics’ the current inflation rate of the countries mentioned below are –

Inflation rate:

🇻🇪 Venezuela: 404%
🇱🇧 Lebanon: 260%
🇸🇾 Syria: 139%
🇦🇷 Argentina: 116%
🇹🇷 Türkiye: 38.21%
🇪🇬 Egypt: 35.7%
🇵🇰 Pakistan: 29.4%
🇳🇬 Nigeria: 22.41%
🇭🇺 Hungary: 20.1%
🇰🇿 Kazakhstan: 14.6%
🇺🇦 Ukraine: 12.8%
🇵🇱 Poland: 11.5%
🇨🇿 Czechia: 9.7%
🇧🇩 Bangladesh: 9.7%
🇸🇪 Sweden: 9.3%
🇬🇧 UK: 8.7%
🇦🇹 Austria: 8%
🇰🇪 Kenya: 7.9%
🇦🇺 Australia: 7%
🇳🇴 Norway: 6.4%
🇮🇹 Italy: 6.4%
🇩🇪 Germany: 6.38%
🇿🇦 South Africa: 6.3%
🇮🇪 Ireland: 6.1%
🇳🇱 Netherlands: 5.7%
🇵🇭 Philippines: 5.4%
🇸🇬 Singapore: 5.1%
🇲🇽 Mexico: 5.06%
🇮🇳 India: 4.81%
🇫🇷 France: 4.5%
🇮🇱 Israel: 4.2%
🇮🇩 Indonesia: 3.52%
🇨🇦 Canada: 3.4%
🇯🇵 Japan: 3.2%
🇷🇺 Russia: 3.2%
🇧🇷 Brazil: 3.16%
🇦🇪 UAE: 3.05%
🇺🇸 USA: 2.97%
🇸🇦 Saudi Arabia: 2.8%
🇰🇷 South Korea: 2.7%
🇩🇰 Denmark: 2.5%
🇪🇸 Spain: 1.9%
🇨🇭 Switzerland: 1.7%
🇳🇪 Niger: 0.27%
🇹🇭 Thailand: 0.23%
🇨🇳 China: 0%
🇦🇲 Armenia: -0.5%
🇦🇫 Afghanistan: -1%
🇸🇨 Seychelles: -1.3%

Deflation, or negative inflation, refers to a sustained decrease in the general price level of goods and services in an economy. This means that overall prices are declining instead of increasing.

The Sri Lankan Navy announced that a Chinese warship has docked at the Colombo Port on a three-day formal visit to the island nation, almost a year after the visit of a controversial Chinese ship with ballistic missile and satellite tracking facilities. In a statement, the Navy said the warship, HAI YANG 24 HAO of China’s People’s Liberation Army, arrived in the capital city on Thursday. The 129-metre-long ship is manned by a crew of 138 and commanded by Commander Jin Xin. It will depart on Saturday, the statement added. In August last year despite security concerns raised by India about the Chinese vessel’s presence in nearby waters, the Yuan Wang 5 had docked at the Hambantota Port following delays.

At the time, Sri Lanka’s Foreign Ministry had said that the government engaged in “extensive” consultations with “all parties concerned” with a “view to resolving the matter in a spirit of friendship, mutual trust and constructive dialogue”. It said the ship was allowed to dock on the condition that no scientific research was conducted in Sri Lankan waters. On its part, China’s Ministry of Foreign Affairs had said that the ship would conduct scientific research “in accordance with international law”.

Congress MP Manish Tewari on Thursday gave an adjournment motion notice in the Lok Sabha to discuss the border situation with China. In his letter to the Secretary-General, Lok Sabha, Manish Tewari said, “I hereby give notice of my intention to ask for leave to move a motion for the adjournment of the business of the house for the purpose of discussing a definite matter of urgent importance, namely: That this House do suspend Zero Hour and relevant rules relating to Question Hour and other businesses of the day to have a discussion on the border situation with China.” He further urged the Government to inform the House of the situation at the border with China adding that reports are coming out from Chushul, Eastern Ladakh that China’s People Liberation Army (PLA) has pitched four tents in a “buffer zone” and their forces are demanding a 15-20 km Buffer Zone inside Indian territory.

“The border situation with China has been extremely tense since clashes broke out with Chinese forces in Eastern Arunachal Pradesh. Despite multiple rounds of talks between India and China, the border dispute continues to persist. Moreover, there have been reports coming out from Chushul, Eastern Ladakh, that the People Liberation Army (PLA) has pitched four tents in a buffer zone, and has demanded a 15-20 km Buffer Zone inside Indian territory,” the letter stated.

“Thus, in light of the aforementioned, I, therefore urge the Government to inform the House of the situation at the border with China, the attempts made by the Government to mediate and settle the border dispute, and the policies introduced by the Government to preserve and protect India’s integrity against possible Chinese aggression,” it added. The Parliament has been witnessing a logjam over a number of issues, including the violence in Manipur, since the beginning of the Monsoon Session on July 20.

The opposition leaders have been demanding a full-fledged discussion on the issue including a statement by the prime minister in the Parliament. Both houses — Lok Sabha and Rajya Sabha — have seen repeated adjournments amid massive ruckus by the opposition leaders. Union Home Minister Amit Shah on Wednesday, while speaking on Manipur violence in Lok Sabha appealed with ‘folded hands’ for an end to the three-month-long cycle of violence in the state and urged Kuki and Meitei communities to hold talks saying violence cannot be a solution to any problem.

“Come and hold talks. I urge both communities to sit with the Centre and talk to resolve the issue. We do not wish to change the demography. Violence is not a solution to any problem. I assure you that we will bring peace to the state. Politics should not be done on this issue,” Amit Shah said.

Congress MP Manish Tewari on Friday gave an adjournment motion notice in the Lok Sabha to discuss the border situation with China. In his letter to the Secretary-General, Lok Sabha, Manish Tewari said, “I hereby give notice of my intention to ask for leave to move a motion for the adjournment of the business of the house for the purpose of discussing a definite matter of urgent importance, namely: That this House do suspend Zero Hour and relevant rules relating to Question Hour and other businesses of the day to have a discussion on the border situation with China.” He further urged the Government to inform the House of the situation at the border with China adding that reports are coming out from Chushul, Eastern Ladakh that China’s People Liberation Army (PLA) has pitched four tents in a “buffer zone” and their forces are demanding a 15-20 km Buffer Zone inside Indian territory.

“The border situation with China has been extremely tense since clashes broke out with Chinese forces in Eastern Arunachal Pradesh. Despite multiple rounds of talks between India and China, the border dispute continues to persist. Moreover, there have been reports coming out from Chushul, Eastern Ladakh, that the People’s Liberation Army (PLA) has pitched four tents in a buffer zone, and has demanded a 15-20 km Buffer Zone inside Indian territory,” the letter stated. “Thus, in light of the aforementioned, I, therefore urge the Government to inform the House of the situation at the border with China, the attempts made by the Government to mediate and settle the border dispute, and the policies introduced by the Government to preserve and protect India’s integrity against possible Chinese aggression,” it added.

Meanwhile, the party floor leaders of the Indian National Developmental Inclusive Alliance (I.N.D.I.A) will hold a meeting today at 10 am in the office of the Leader of the opposition in Rajya Sabha in Parliament to chalk out the strategy for the floor of the house. The Parliament has been witnessing a logjam over a number of issues, including the violence in Manipur, since the beginning of the Monsoon Session on July 20. The opposition leaders have been demanding a full-fledged discussion on the issue including a statement by the prime minister in the Parliament. Both houses — Lok Sabha and Rajya Sabha — have seen repeated adjournments amid massive ruckus by the opposition leaders.

Chinese President Xi Jinping has reiterated Beijing’s unwavering support to Islamabad, saying that “no matter how the international landscape may change, China will always stand firmly with Pakistan”. He made the remarks in a congratulatory message to the decade of CPEC celebration event held in Islamabad on Monday which was also attended by Chinese Vice Premier He Lifeng, who is currently on a three-day visit to Pakistan, reports Geo News.

Speaking about the bilateral ties, President Xi stressed that both countries will continue to improve overall planning and expand and deepen cooperation. Pointing out that CPEC is an important pioneering project of the Belt and Road cooperation, Xi said that China will work with Pakistan to further build the project into an exemplary project of high-quality Belt and Road cooperation, Geo News reported. He added that both countries will work to aim for high-standard, sustainable and livelihood-enhancing outcomes.

“Since its launch in 2013, China and Pakistan have been advancing CPEC under the principle of extensive consultation, joint contribution and shared benefits, and have achieved a number of early harvests,” he added. This has added new impetus to the economic and social development of Pakistan and laid a good foundation for regional connectivity and integration, he said, adding that it is a vivid testament to the all-weather friendship between China and Pakistan, and provides an important underpinning for building an even closer China-Pakistan community with a shared future in the new era.

Following the United States’s move to open an embassy in the Pacific island nation of Tonga on May 9, the US Secretary of State Antony Blinken has pledged to support Pacific countries, reiterating a warning about the perils of  ‘predatory’ Chinese investment, reported Al Jazeera. As Washington increases its efforts to counter China’s growing influence in the region, Blinken visited the capital Nuku’alofa on Wednesday, making it the first US Secretary of State to pay an official visit to Tonga. While pledging support for important projects, Blinken said, “We’re a Pacific nation. We very much see the future in the Indo-Pacific region. We really understand what is a priority for the people here,” he said, citing issues like climate change, development and illegal fishing. There is a long list of things that we are working on together, but it’s all driven by focusing on what’s concrete, what can really make a difference in people’s lives,” Blinken added. However, Blinken also warned about getting aid from Beijing saying that it often comes with strings attached, reported Al Jazeera. As China’s engagement in the region has grown, there has been some from our perspective increasingly problematic behaviour,” Blinken said.

Shared respect for democracy

He further claimed that China had been behind “some predatory economic activities and also investments that are done in a way that can actually undermine good governance and promote corruption.” However, Tongan Prime Minister Hu Takavemeiliku Siaosi Sovaleni, while welcoming a “shared respect for democracy, rule of law and the rights and freedoms of others, said, “His presence here today is a testament to the fact that our partnership is growing from strength to strength.” Tonga is a nation of 171 islands in the South Pacific about two-thirds of the way from Hawaii to New Zealand, according to the CIA’s World Fact Book, reported Al Jazeera. It is a Polynesian archipelago of about 100,000 people and is the latest in a string of Pacific island states being targeted in a renewed US diplomatic push.

The country is considered upper-income for Pacific Island nations, but much of its wealth comes from remittances from the overseas diaspora, according to the CIA, which also notes it is seeing “rapidly growing Chinese infrastructure investments.” After the visit to Tonga, Blinken will leave for Wellington, New Zealand, where he will attend the Women’s World Cup match between the US and the Netherlands. Moreover, he will also have meetings with New Zealand officials. Following his visit to New Zealand, Blinken will move to Brisbane, Australia to hold meetings with US Defense Secretary Lloyd Austin and their Australian counterparts on July 28-29, according to Al Jazeera. This official visit to Tonga marks Blinken’s third trip to the Asia-Pacific in the past two months, following a visit to China last month and a visit to Indonesia for talks with Southeast Asian officials last week. His visit is followed by the State Department’s message to the Congress about its plan to increase diplomatic personnel and spending for facilities at new US embassies in the Pacific islands, reported Al Jazeera.

North Korea has invited delegations from China and Russia to participate in the 70th-anniversary celebrations of the Korean War armistice, Pyongyang State media has reported. This is the first known case of North Korea inviting foreign guests to the country since it closed all borders to contain the pandemic, even though cargo transportation partially resumed between North Korea and China last year, according to a report in Yonhap, a major South Korean news agency.

North Korean state media, the Korean Central News Agency (KCNA) on Tuesday reported that Russian Defence Minister Sergei Shoigu has been invited by the Ministry of National Defence of the Democratic People’s Republic of Korea (DPRK) for the 70th anniversary of the victory in the great Fatherland Liberation War. “At the invitation of the Ministry of National Defence of the Democratic People’s Republic of Korea (DPRK), a military delegation of the Russian Federation led by Defence Minister Sergei Shoigu will pay a congratulatory visit to the DPRK on the occasion of the 70th anniversary of the victory in the great Fatherland Liberation War,” KCNA reported.

“The visit will mark an important occasion in further developing the traditional DPRK-Russia friendly relations in keeping with the demand of the times,” the KCNA further said. The Russian Defence Ministry confirmed that the Russian delegation led by Shoigu will visit North Korea on July 25-27 to take part in festive events marking the 70th anniversary of the DPRK’s Victory in the Fatherland Liberation War of 1950-1953, according to TASS.

Strengthening bilateral ties

The Russian news agency cited the country’s defence ministry to state that the visit would contribute to strengthening bilateral military ties and mark an important stage in the development of cooperation between the two countries. North Korea has also invited a Chinese party and government delegation to the armistice celebrations. Yonhap news agency cited KCNA to report that the Central Committee of the North’s ruling Workers’ Party and its government has invited a Chinese delegation led by Li Hongzhong, a member of the Political Bureau of the Central Committee of the Chinese Communist Party to the anniversary celebrations.

North Korea is set to celebrate the 70th anniversary of the Korean War armistice, signed July 27, 1953, this week. The North refers to the conflict as the Great Fatherland Liberation War and the day of the armistice signing as Victory Day.