An investor favourite as recently as 2017, India is a prime example of how volatile individual markets can be. Wide-ranging economic reforms helped Indian equities race ahead in 2017, a year in which credit rating agency Moody’s famously upgraded the country’s government debt.
Progress has since stalled. The economy endured a gruelling slowdown in 2019. When the coronavirus struck this year, India enacted an abrupt lockdown, later unleashing significant fiscal and monetary stimulus. The economy is now easing its way out of lockdown, but could face further pain.
In a note from 15 June, Capital Economics calculated that India’s GDP may have fallen by some 15 per cent in the second quarter of 2020, warning the country was among those “easing lockdowns without any sign that coronavirus infections are being brought under control”.