The distant future.

In 2023, "Maybe the world will see the breakout of peace in Ukraine, the taming of inflation, lowering of interest rates globally and, hence, a fabulous stock market boom. On the other hand, maybe the Ukraine war will escalate, inflation will surge again, and a deep global recession will send stock markets crashing." wrote Swaminathan S Anklesaria Aiyar. Prescient indeed. But is the stock market the only index of the health of nations and the well-being of their citizens? "I am a qualified optimist." "But this assumes political leaders will ultimately be rational, and that can never be taken for granted." "India's economic momentum post-Covid-19 has been the inheritance of its own actions -- it comes from a few years of heavy lifting on policy," wrote Ridham Desai of Morgan Stanley. "With these changes, by 2031 we expect India's GDP to more than double to over $7.5 trillion, the stock market to compound annually at 11% to around $10 trillion, a discretionary consumption boom led by a rise in per capita income from $2,000 to over $5,000 and a quintupling of households earning in excess of $35,000/year to over 25 million, a rise in credit to GDP from 57% to 100%, causing a 17% annual compounding of credit growth, and a doubling of India's share in global exports." But then, "A research paper published by Goldman Sachs...projected Pakistan to be the sixth largest economy in the world by 2075 given 'appropriate policies and institutions' are in place." Dawn. "By that time, the research projects Pakistan's Real GDP to have grown to $12.7 trillion and its GDP per capita to $27,000." Meanwhile, Pakistan's foreign exchange reserves "declined by $294 million to $5.8 billion - their eight years' low - making it even more difficult for the country to repay its foreign debts." Dawn. To put that in perspective, "India's foreign exchange reserves fell to $562.81 billion in the week through Dec, 23, the Reserve Bank of India's (RBI) statistical supplement showed."Reuters. Despite such huge reserves, "The Indian rupee ended 2022 as the worst performing Asian currency with a fall of 10.14%, its biggest annual decline since 2013, as the dollar rocketed on the US Federal Reserve's aggressive monetary policy stance to tame inflation." HT. And yet, "The Indian Rupee has been strong against every currency. Reserve Bank has used foreign exchange reserves that it has to intervene in the market to make sure that the Dollar-Rupee fluctuation does not go too much," said Finance Minister Nirmala Sitharaman. A strong rupee makes our exports much more expensive, so, "After contracting 16.7 percent year on year (YoY) to USD 29.8 billion in October, merchandise exports in November were USD 31.99 billion." BW. "Merchandise imports in November 2022 were USD 55.88 billion." Hence, our current account deficit (CAD) jumped to a 9-year high of $36.4 billion, or 4.4% of GDP. "The RBI said that the wider CAD was due to expanding merchandise trade deficit to $83.5 billion from $63 billion in Q1FY23." TOI. India at third, Pakistan at sixth, why do US banks predict fairy tales? Probably because no one will live till then.