India tops EM economies for third straight year in FY24
India has maintained its position as the best-performing emerging market (EM) economy for three consecutive fiscal years, according to a monthly Mint tracker. This achievement is underpinned by consistently high manufacturing activity, relatively controlled inflation, and lately, superior economic growth.
Despite fluctuating monthly rankings among a selection of nine EMs, India’s annual ranking (based on average monthly scores) has consistently been No. 1 for fiscal years 2021-22, 2022-23, and 2023-24.
In FY24, India led the rankings for 10 out of the 12 months, only falling to second place in April and November 2023.
Over the last three financial years, India’s lowest monthly rank was fifth, in January 2023, and in fourth position in February and October 2022.
In March, India had a composite score of 66 out of a maximum possible 100, with China and the Philippines scoring 64 and 60, respectively, to claim the second and third spot. For the full year of 2023-24, India’s average score was 76, well ahead of Brazil (61) and China (59).
Launched in September 2019, Mint’s Emerging Markets Tracker provides a summary of
Over the past three fiscal years, India’s lowest monthly rank was fifth, in Jan 2023. It ranked fourth in Feb 2022
economic activity across the 10 large emerging markets based on seven high-frequency indicators. One original member in the list, Russia, has been temporarily dropped since its trade data has not been reliably available for the last two years.
A country’s score on a given metric is a measure of its distance from both the best performer and worst performer. While the best performer gets a score of 100, the worst gets zero. A country with a reading that is halfway between gets 50. The average of the scores of all seven indicators for a country gives its composite score.
India’s score for March was at its lowest in four months, having exceeded 80 in January and February. This dip was primarily due to poor stock market performance—the worst among the EMs in the tracker (it looks at month-on-month change in average daily market capitalization over a month; India’s fell nearly 1%). Additionally, exports contracted for the first time in four months. But India was still able to retain the top slot because of the manufacturing purchasing managers’ index (PMI), where it has had the best reading in the league table for 11 months on the trot. It also has had the best GDP growth for four straight quarters.
China climbed two spots to No. 2 with the lowest inflation rate among peers. Its stock market performance was also the strongest among EM economies. The Philippines continued to hold the third spot with the highest exports growth and a relatively better import cover.
The seven high-frequency indicators are real GDP growth, manufacturing PMI, export growth, retail inflation, import cover, exchange rate movement, and stock market capitalization. Latest available data is used, so when it gets updated the scores also get updated retrospectively. This means all the rankings are provisional.
payal.bhattacharya@livemint.com