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The Long Run

India Economics Update

Prospects for female labour participation in India

We agree with PM Modi’s assertion in his Independence Day speech over the weekend that boosting female participation in the labour force could have a major positive impact on the economy, but in truth the government’s record in this area is poor. Looking ahead, there are still reasons to think that female employment will rise over the coming years but we aren’t convinced that it will be transformational. In view of the wider interest, we are also sending this India Economics Update to clients of our Long Run Service. Asia Drop-In (25th Aug.): What’s the economic impact of a weak yen? What does the latest China-Taiwan flare-up mean for decoupling? How ugly are conditions in China’s real estate sector? Join economists from across our Asia services for this regular briefing on the region’s big investment stories. Register now.

15 August 2022

Long Run Returns Monitor

Long Run Returns Monitor (Q3)

Our Long Run Returns Monitor provides our updated long-term projected returns for major asset classes, as well as a summary of the macroeconomic forecasts which underpin them. All projections in this publication are as of 10th August 2022. See a more detailed explanation of our views in our Long Run Economic Outlook and Long Run Asset Allocation Outlook.

12 August 2022

Long Run Update

Composition of spending will change as populations age

The composition of spending changes as consumers age, with a greater proportion allocated to healthcare, food and drink, and less to education, transport and recreation. The experience of countries that have already aged significantly, such as Japan, suggests that this will have a significant impact on employment in these sectors in countries that are set to age rapidly over the coming decades. What’s more, this could weigh on productivity growth as the sectors likely to see the greatest increase in demand are typically more labour-intensive.

1 August 2022

Our view

We do not expect the pandemic to do permanent damage to global economic growth as vaccines allow activity to resume. There will be sustained behavioural changes, but these need not be negative. Note, for example, that technology use has accelerated in many advanced economies, supporting our view that future productivity growth will be stronger than most expect. Another key legacy will be higher public debt, but we expect this to be managed through sustained low interest rates and by central banks tolerating a significant rise in inflation. The increased pushback against globalisation has strengthened our conviction that EM catch-up will slow. Meanwhile, the green energy intensive fiscal stimulus around the world has brought forward the likely timing of peak oil demand, which will weigh on oil prices and see some EMs struggling to diversify.