Economic Recovery to Pre-Pandemic Levels

Every economy reaches a stage where data begins to signal intent, not just performance. India is entering that phase now. The numbers are no longer isolated markers—they come together to form a clear economic story built on confidence, stability, and steady structural change. The foundation of this narrative is consumption. GST collections at ₹1.82 lakh crore highlight strong formal activity and resilient domestic demand. This reflects broader compliance, deeper digital adoption, and an expanding tax base, largely driven by economic momentum. Manufacturing supports this strength. A PMI of 58.4 points to consistent expansion, driven by stronger order books and improving capacity utilization. Services activity is broad-based, lifted by hospitality, travel, financial services, logistics, and IT-enabled segments, reflecting both local demand and stable global outsourcing flows. Credit trends reinforce the growth picture. Non-food credit is expanding at 14.5% YoY, supported by retail demand, working capital needs, and early signs of private capex revival. Banks are better capitalized and more willing to lend, allowing households and enterprises to invest and expand with confidence. Inflation, once a persistent challenge, is easing. CPI near 4.2% reflects improved food supply conditions, stable energy prices, and greater logistics efficiency. This gives the RBI room to maintain policy stability. Softer food inflation also helps support consumer sentiment and anchors near-term expectations. Externally, India is showing resilience despite global volatility. Exports in electronics, pharma, and engineering goods are gaining traction, and services exports remain a strong contributor through IT, consulting, and financial services. Forex reserves of ~USD 650 billion offer a substantial buffer and reinforce India’s external credibility, helping policymakers manage currency pressures with confidence. A significant shift is unfolding in the investment landscape. Government-led capex in transport, energy, and defence is building long-term assets and crowding in private investment. Corporate balance sheets are at their strongest in years—low leverage, healthier profitability, and better capacity utilization are laying the groundwork for a new capex cycle across manufacturing, infrastructure, and technology-driven sectors. Equity markets have already recognized this combination of stability and momentum. Earnings remain strong across BFSI, autos, consumption, capital goods, and specialty manufacturing. Even with valuations above historical averages, investors continue to pay a premium for India’s visibility, resilience, and consistent macro performance. #equity #india #economy #macroeconomics #debt #inflation

The track of Canadian real GDP since the pandemic looks better now than it did before Statistics Canada's revisions. The agency does its revisions in November each year and those done in 2021-2025 each revised real GDP upward (see Statistics Canada table 36-10-0491-01). The pace of recoveries from major decreases in domestic output are sometimes underestimated by the sub-annual surveys that are used to produce the early estimates, and that was so here. In subsequent years as annual surveys and administrative data become available - especially data from the tax system - better estimates are possible and in this instance these imply stronger growth than was apparent in the preliminary estimates. Chart 1, using the latest statistics, shows real GDP grew very slightly above trend after the pandemic came to an end, although it fell a little below trend in the latest quarter. The earlier estimates, before the revisions, indicated real GDP growth was below the pre-pandemic trend. However, real GDP per capita growth has remained well below its pre-pandemic trend (Chart 2). The reason for this was the surge in non-permanent residents occurring mainly in 2022 and 2023. The job vacancy rate increased sharply in 2022 and businesses lobbied the federal government hard for it to relax the regulations governing business' ability to bring in temporary foreign workers. At the same time the provincial governments were looking for ways to reduce their spending and lobbied the government to relax the regulations controlling the entry of foreign students. Foreign students pay much higher education fees than do Canadian students and these allowed the provincial governments to cut back on their funding for the education systems. The government gave in to these pressures and did relax the regulations very substantially. The result was an unprecedented surge in the number of non-permanent residents in Canada, causing the population growth rate to triple. The growth in population was an important factor helping to sustain the growth in real GDP after the pandemic. However, since the income being earned by the non-permanent residents was generally quite a lot lower than income earned by the average Canadian permanent resident, this caused the per capita real GDP to fall between the start of 2022 and the end of 2023. After that the government began reimposing tougher regulations to limit the number of non-permanent residents in the country. As a result, real GDP per capita stopped falling and began a very slow rise, although it has a long way to go before it gets back to its pre-pandemic trend line. The federal government has clear responsibility for this episode, but the business and provincial government communities must share some of the blame as well. Reducing regulations can sometimes be a positive force that improves productivity and growth in the economy, but most regulations are there for good reasons and reducing them can also have undesirable consequences. 

Good morning. One of the more underdiscussed economic developments following pandemic era shocks has been US economic outperformance relative to its peers. It is due to bold monetary and fiscal policy in response to the shocks and policy efforts in its aftermath to harden domestic supply chains, bolster energy independence and long-term sustainability as well as the rebuilding of American domestic infrastructure. Since 2020 real US GDP has increased 9.4% compared to its economic peers. Those peers have experienced comparable growth of: · Canada 4.9% · Italy 4.7% · EU 4% · France 3.8% · Japan 3.1% · UK 2.3% · Germany 0.3% Perhaps more importantly is that the U.S. is approaching what I think is a productivity boom. If one asks how the US can grow so fast even as hiring slows from post pandemic era highs the answer is productivity. With US productivity increasing at a 2.7% year over year pace this is the best that the American economy has experienced since the last productivity boom which happened between 1995-2004. That is why wages above inflation are rising, corporate earnings and profits rising and why the U.S. continues to outperform its peers since the pandemic. The increases in productivity are a function of smart policy in the aftermath of the pandemic to increase supply across the American economy and long-term investments to integrate sophisticated technology into the production of goods and provision of services. Rising productivity equals improving living standards for American households and rising profits of US firms. If one looks at gross national income per capita in the US since 2020 (see the data visualization below) compared to the major economies, something special is happening inside the U.S. economy. And to be clear that does not include the efficiencies and increased productivity that will occur due to artificial intelligence and quantum computing that lie ahead. While it may be fashionable among the recessionista doom-scrollers to ignore the fundamental improvement in the American economy they do so at their own peril. The U.S. economy is outperforming in growth, employment and of course in achieving price stability without causing the economy to fall into an extended period of slow growth or outright recession, it has achieved a remarkable policy achievement. Those that recognize the good and remarkable things happening in the economy, who have the skill to manage the risks around the outlook and make critical investments in the future of their households and firms will be the winners.

While it's practically a national sport to be down on Melbourne, new data shows that the city is well and truly back. 2023/24 data from .id (informed decisions) shows the City of Melbourne’s economy is now 13.4% bigger than in 2019 (outpacing Victoria as a whole, which grew by 11.4%), while the number of jobs is up by 72,000. Confidence has caught up, too: Roy Morgan's June survey puts Victoria’s business confidence at 106.6, the strongest in the country and 20 points higher than a year ago. The pandemic hasn't changed the fact that density matters. When talent, capital, research and culture meet in one place, productivity follows. The agglomeration effect remains a core engine of Australia’s prosperity - and these benefits flow into fast-growing suburbs and regional centres that connect to the same networks. The groundwork for this recovery was laid during the pandemic years through focused, collaborative economic-development initiatives. The outcome is a reminder that investing in vibrant, connected places - whether a city centre, a growth corridor or a regional hub - really does pay off.