Do it yourself

The global macro landscape remains in flux. A strange mix of structural deflationary forces is colliding with equally powerful inflationary pressures. Technology, demographics, geopolitics, and policy responses are all pulling in different directions — making this one of the most complex investing environments in decades. I am not competent enough to decode where the current conditions are driving us. Nonetheless, I would like to share some random thoughts with the readers and seek their views on these. Inflation vs Deflation: The great tug of war At the structural level, Artificial Intelligence, aging demographics, and the rapid adoption of renewable energy are profoundly deflationary for the global economy. ·           AI is driving efficiency, collapsing cost structures, and displacing traditional labor models. ·           Demographics in most major economies — from China to Europe to Japan — ar...

The latest Periodic Labor Force Survey (PLFS), released on 16 August 2024 by the National Statistical office (NSO), provides some useful insights into the current employment conditions in the country. The following are some of the key observations from the Survey report. The Good ·          The employment conditions have improved during 1QFY25. The WPR-U improved for all ages and both genders. The Youth WPR-U improved from 39.3% (1QFY24) to 40.8% (1QFY25). For all workers, WPR-U improved 38.4% to 39.3% during this period. ·          The LFPR-U male workers improved from 57.2% in (1QFY24) to 58.9% in (1QFY25) for youth (15-29yrs) and from 73.5% to 74.7% for all workers above 15yrs of age. ·          Self-employed female workers increased in urban areas from 39.2% to 40% while the number of self-employed male workers in urban areas increased from 39.5% to 40%. ...

Last week I highlighted a few larger global trends that are not getting their due attention in the popular market narratives  ( see Gorillas in the Room ) . Today, I want to draw the attention of the market participants towards a major India specific trend that shall have far reaching implications for the Indian economy and therefore Indian markets. “Favourable demographics” has been inarguably one of the major themes of the Indian economy and markets for the past two decades. The latest round of National Family Health Survey (5th Round - 2019-21) highlights that this theme might soon run out of currency and demographic dividend (income) might get replaced by demographic interest (expense). India to become older sooner than previously expected The total fertility rate (TFR) for India is already below the replacement threshold. TFR indicates the average number of children a woman is likely to bear during the age between 15 to 49 years. As per the global standards a TFR of 2.1 ...