India growth slides to two-year low

Economics, India, Markets, Polyolefins

By Malini Hariharan

Economic data from India continues to disappoint. The economy grew at only 6.9% for the quarter ended September, the weakest pace in more than two years and below forecasts. Activity in the manufacturing sector slowed sharply as a result of high interest rates. The segment, which accounts for around 16% of the GDP, expanded by only 2.7%, well below the 7.2% growth recorded in the previous quarter.

Interest rates have been raised 13 times in the last 20 months to control inflation but it is stubbornly running at over 9%. A looser monetary policy would help stimulate growth but the move is unlikely until inflation falls to a manageable level.

The weak economy has already had an impact on domestic demand for polymers.

The rupee’s steady slide against the dollar, nearly 7% in November, has also become a big problem for importers. This is the rupee’s worst fall in the last 16 years.

In the diammonium phosphate (DAP) market, international suppliers have agreed on substantial discounts to Indian buyers to offset the devaluation of the rupee, reports ICIS news. While some market players are concerned that the move could set a precedent, suppliers probably have no choice as India represents about 50% of the DAP market.

But depreciation of the rupee is helping local producers giving them an opportunity to raise prices. Companies such as Reliance Industries have managed to push through three price hikes for polyethylene (PE) and polypropylene (PP) in the last three weeks.

The government is targeting GDP growth of 7.3% for the full year but even this could be difficult to achieve given the level of internal and external risks.


A quick recovery for butadiene


By Malini Hariharan Asian butadiene prices are once again on their way up, risin...

Learn more

China's Leaders Are Boxed In


By John Richardson IT seems inevitable that petrochemical markets will respond p...

Learn more
More posts
Omicron, petchems and the developing world: we might get lucky this time, but maybe not next time

By John Richardson UNTIL ALL of us are adequately vaccinated none of us are sufficiently protected i...

Benzene, the need for a new global Industrial Revolution and the big challenges that lie ahead

By John Richardson THE CHART BELOW shows that 60% of global benzene production in 2021-2040 is forec...

Global polypropylene could also move from inflation to deflation in Q1 next year

By John Richardson WE ALL NEED TO ASK ourselves whether the global patterns in polyethylene (PE) and...

Global polyethylene could move from inflation to deflation by as early as Q1 2022

By John Richardson THE BALTIC DRY INDEX, one of the excellent barometers of overall economic activit...

As China coal shortages end, polyolefins margins reach historic lows on oversupply

By John Richardson AGAIN, DON’T say I didn’t tell you. In my 11 October blog post, having talked...

Dip in Chinese PP exports only temporary with Q1 2022 resurgence looking likely

By John Richardson TRADE DATA when combined with price assessments, supply and demand estimates and ...

Global polyethylene supply could lengthen, becoming a buyers’ market, sooner than many people think

By John Richardson RARELY, IF EVER, have events felt so bafflingly complex in the global polyethylen...

China could either see net imports of 63m tonnes in 2021-2031 or net exports of 18m tonnes!

By John Richardson CONFUSED BY the above chart? Once again I certainly hope so, provided confusion i...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more