Which is the only major emerging market economy to have seen an improvement in its prospects for growth this year? A clue is that this country is likely to be the world's fastest growing major economy in 2016.
The answer is India. It is expected to post 7.5% growth this year. This rate of growth would put India well ahead of the other fast-growing economies in the world: Vietnam at 6.8%, China at 6.5% and the Philippines at 6.3%.
How is that India, alone among major countries, has managed to avoid the global economic headwinds? A recent discussion with Deloitte's India economist, Rishi Shah, provided a fascinating insight into this conundrum. But what follows is, as usual, a personal view.
Unlike many emerging market economies, such as Russia, Venezuela or Brazil, India is not a major international producer of commodities. India imports around 75% of the oil its uses and overtook Japan to become the world's third largest importer, after the US and China, in 2014. When commodity prices fall, as they have in the last five years, India benefits from lower prices. The decline in oil prices has also helped reduce India's high inflation rate.
India's relatively small industrial sector has softened the effects of a global slowdown in industrial production and a related weakness in international trade. Industrial production accounts for a smaller share of GDP than in the Chinese economy and many other emerging market economies. Moreover, India exports little to China, where growth rates have slowed markedly in recent years.
The outsize parts of the Indian economy are services and consumer spending. Consumption accounts for almost 60% of Indian GDP, well above China's 37% and in line with many Western nations. This inward orientation means Indian growth is more self-sufficient and rather less subject to uncertainties overseas.
Demographics also favour India. The median age of its population is just 27 and its working-age population is expanding, a marked contrast with China where the workforce is now shrinking. Due to its faster population growth India is due to supplant China as the world's most populous nation in 2028.
The election of Narendra Modi as India's Prime Minister just under two years ago boosted equities and business confidence, on hopes of pro-market economic reforms. Many Western commentators see progress on reform as having been patchy. But under Raghuram Rajan, the head of the India's central bank, monetary policy has become more credible, thanks in part to the adoption of an inflation target.
The contrast between the performance of the Indian and Chinese economies in the last couple of years has been particularly pronounced. The three engines of Chinese growth in recent years, investment, industrial production and exports, are under pressure. In a world of soft export demand and industrial overcapacity China's growth mix looks less attractive. Indeed, the Chinese authorities are seeking to engineer a shift towards a new model of growth, focused on higher value-added manufacturing, services and a larger consumer sector.
But India has a lot of catching up to do. Its population of around 1.3 billion people is only slightly less than China's at 1.4 billion. But India is poorer, with per capita GDP at 40% of Chinese levels. India ranks well below China on the World Bank Doing Business Index (130th vs 84th) and in the World Economic Forum's Global Competitiveness Index (71st vs 28th). External commentators, such as the OECD, argue that India needs to undertake extensive, pro-market reforms to raise competitiveness. Such reforms are politically contentious. Those who lose out do so quickly, and are vocal in their opposition. Benefits tend to emerge with time and are diffuse. But the path of such reforms is, at least eased by what remains, in global terms, a notably bright outlook for Indian growth over the coming years.
P.S. Last week's Monday Briefing pointed out that negative interest rates encourage households to hold money as cash, creating a liquidity crunch for banks. This is exactly what seems to be happening in Japan, where the central bank's negative interest rates means banks have reduced deposit rates to zero. Sales of safes in Japan have surged as individuals and businesses hold onto more cash.
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