NEW DELHI : For three months from November, India outperformed its emerging market peers as its economic recovery continued apace, even defying the third wave of the pandemic. But Russia’s invasion of Ukraine late last month added to inflationary pressures and caused a plunge in market capitalization, pushing India to third place, according to the latest update from the monthly market tracker. emerging from Mint. Brazil, which was one of the first to raise interest rates last year, came out on top, benefiting from sanctions against Russia, followed by the Philippines.

Mint’s Emerging Markets Tracker, launched in September 2019, takes into account seven high-frequency indicators across 10 major emerging markets to assess India’s relative position in the rankings. It is updated approximately three weeks after the end of a month once all data is available.

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Brazil’s stock market emerged as the best performer in February as Russia’s withdrawal from benchmarks led to a reallocation of money to the country, which offers a better return due to high interest rates. The Philippines also benefited from the crisis, although its currency depreciated slightly. Russian stock markets, on the other hand, fell the most, followed by India and China.

China’s rise in coronavirus cases and the country’s zero-tolerance policy towards covid-19 are risks to its own growth. The ongoing wave of infections could further amplify the supply chain issues the world is currently facing.

The Thai stock market and currency performed well in February. However, weaker GDP growth in the December quarter dropped the country to fourth place.

While India ignored the negative impact of the spread of the Omicron variant in January, the country could not escape the fallout from the Ukraine crisis, the US Federal Reserve’s decision to raise interest rates of 25 basis points last week should add to the risks.

For starters, the surge in crude oil prices above $100 a barrel spooked markets and heightened inflation concerns. India’s inflation, despite a favorable base, rose to 6.07% in February from 6.01% the previous month even as fuel prices were frozen due to assembly elections. Soaring oil prices, combined with a delayed rise in fuel prices, are expected to keep inflation high over the coming months.

The Reserve Bank of India has so far ignored inflation footprints above its upper tolerance limit of 6.0% in order to support growth. However, inflationary risks and fears of investors fleeing the country following the Fed’s rate hike to more attractive emerging economies could put the central bank in a tight spot at its April meeting.

“Inflation will exceed central bank targets in India, the Philippines and Thailand in 2022, but the policy responses will be different,” Nomura said in a recent report. of cumulative increases in repo rates, starting in June.”

On other fronts, India performed well, with the manufacturing Purchasing Managers’ Index (PMI) rising to 54.9 in February from 54.0 the previous month.

The services PMI also showed a slight rise to 51.8 from 51.5. Exports, once again, remained strong, growing more than 20% year-on-year in February. However, Brazil, Russia, Indonesia and Thailand overtook India. While India posted steady growth in the December quarter, the GDP print of 5.4% was below expectations.

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