I took note of something the other day, a recent previous post of mine and one from a long time ago rested around the topic of gold. While that is not interesting in itself, my views have always been that I cannot comprehend its attractiveness. However as with a lot of things in life beauty is in the eye of the beholder.
On both occasions when I opined on Gold, it was none other than the good people of India who most visited my little blog. Imagine my surprise when little old me suddenly had attracted visitors to my page from well outside of my own sheltered network. But it just goes to show me that just because I deem an asset to be worthless, there are plenty of people out there who disagree with me.
On the subject of plenty of people out there, India is not only a BRIC country but a very big part of that BRIC. While its China that gets most of the limelight its worth reminding ourselves that India also contains a population of 1.2bln people and is a bit of a powerhouse in its own right.
Lets look at some of the data points coming from there at the moment.
Population 1.2bln people
Unemployment: 4.9% (solid number)
Labour force participation: 52%, I would imagine this number will change along with cultural changes and attitudes towards women in the workplace.
GDP annual growth rate: 7.5%
Inflation rate : 3.78%
Interest rates: 7.25%
Negative balance of trade: Which if you look at their top imports and exports could swing back closer to flat soon, due to large moves lower in the price of Crude and Gold.
Foreign direct Investment: While certainly erratic has gone from very little in the early naughties to respectable levels.
Despte some pretty solid fundamentals and a well educated workforce the currency has depreciated rapidly over the last few years, USDINR, Gone from 40 rupees per dollar to 65. You can see this went a bit more exponential when the FED ended QE and started to hint at raising rates, most EM type countries currencies have had similar reaction.
There are plenty more economic indicators to look at here: http://www.tradingeconomics.com/india/indicators all of which look pretty OK to me and certainly would start me to look at INR as a currency to invest in over the longer term. Many will argue that India has a corruption problem, which may be true but you could say that about a lot of countries especially the most developed ones.
One big problem is presumably bureaucracy, India ranks 142 in a a recent “ease of doing business” survey, which isnt great considering it puts them in the lowest quartile of the report. The good news is there is huge potential for upside if they can just get their act together, bad rankings like that can change quickly with minor changes.
Just thought it was worth highlighting considering everyone loses their cool over China when their is a similar and roughly equal powerhouse lying await in the corner also.