VSn Sunday, November 12, India turned on the lights. Or rather millions of lights. Thus begins Divali, the festival which celebrates the victory of light over darkness. It’s Indian Christmas, which is celebrated for five days, where we give each other gifts and wish each other the best for the new year ahead. The first gift, which will only interest economists and politicians, will be the publication of the inflation rate for the month of October.
This should confirm the decline in price increases, which reached 7% in July before falling in the following months and should, according to analysts, be around 4.8%, close to the 4% target. that the central bank had set. It was therefore right not to raise its rates, believing that the increase was temporary, due to the disasters of the monsoon.
The new Indian era also opens with information which excites the entire subcontinent: the country is qualified for the semi-finals of the world cricket championship, which takes place on its soil. He will face New Zealand, when Australia will face South Africa. The former master of the country, England, has therefore bitten the dust, which is not to displease the Indian in the street.
Reforms and global successes
But the new Indian year is also that of all economic hopes. Its economic growth is the strongest of all major countries. Its gross domestic product increased from 2,000 billion dollars (1,871 billion euros) in 2014 to 3,750 billion dollars in 2023. The fifth economic power in the world, it has overtaken, as in cricket, the United Kingdom. Its demographics and the youth of its population, coupled with strong investments in infrastructure and digital technology, have created the conditions for exceptional dynamics. Added to this are reforms in tax, banking and market opening. Its global successes in digital services and pharmacy could well be enriched by the development of an alternative industrial base to a China neglected by the West.
All this contrasts strangely with the latest Chinese figures, which mark a spectacular slowdown in consumption and exports. Deflation threatens in a rapidly aging country. But, like in cricket, the match is very long and unpredictable. The Indian team must fight its old demons: endemic corruption, the failing education system, an archaic social structure, an increasingly authoritarian political regime… The light has not yet won against the darkness.