The International Monetary Fund (IMF) on Tuesday slashed India's growth forecast for 2022-23 (FY23) by 80 basis points to 7.4 per cent, citing less favourable external conditions and rapid policy tightening by the central bank. In its update to the April World Economic Outlook, the IMF said that though a global recession in 2022 was ruled out with a growth estimate of 3.2 per cent, the balance of risks was squarely to the downside, driven by a wide range of factors that could adversely affect the global economic performance. "The risk of recession is particularly prominent in 2023, when in several economies growth is expected to bottom out, household savings accumulated during the pandemic will have declined, and even small shocks could cause economies to stall.
Exports had recovered in November to grow at 0.59 per cent from a 12 per cent contraction in October.
Prime Minister Sharif will be visiting Beijing with a high-powered delegation from November 1, 2022, where minutes of the joint coordination committee meeting will be signed.
Union Minister Nirmala Sitharaman on Thursday said speaking Hindi gives her 'shivers' and she speaks the language with hesitation.
The country's foreign exchange reserves touched a life time high of USD 555.12 billion after it surged by USD 3.615 billion in the week ended October 16, according to RBI data.
After a secret voting by the 24 members of IMFC last Friday, India, Italy and Canada were the only countries that remained in contention for the position, which was traditionally headed by Europe.
The position has been vacant since July after the previous incumbent British Finance Minister Gordon Brown vacated the post after becoming the Prime Minister. Brown chaired IMFC for a decade.
When he didn't respond (Mr Saver has lost count of how many relationship managers he has had in the past few years!), the gentleman landed up at his doorstep and started pleading with him to open fixed deposits with the bank, observes Tamal Bandyopadhyay.
Announcing the bi-monthly monetary policy, Reserve Bank of India Governor Shaktikanta Das said the RBI's internal survey says manufacturing, services and infrastructure sector firms are optimistic of the business outlook.
Gold reserves rose by $320 million to $31 billion.
India's external debt rose by 8.2 per cent year-on-year to $620.7 billion as of March 2022, which according to the finance ministry is sustainable. While 53.2 per cent of it was denominated in the US dollar, Indian rupee-denominated debt, estimated at 31.2 per cent, was the second largest, as per the status report on India's external debt released by the ministry. "India's external debt continues to be sustainable and prudently managed. As of end-March 2022, it stood at $620.7 billion, growing by 8.2 per cent over the level a year ago.
The finance ministry has cautioned that global and regional uncertainties and domestic disruptions may keep inflationary pressures elevated in the coming months, warranting "greater vigilance" by the government and the Reserve Bank of India (RBI). "Russia's decision to terminate the Black Sea grain deal, along with dry conditions in major wheat-growing areas, caused a price spike in cereals. Domestic factors like white fly disease and an uneven distribution of monsoon exerted pressure on vegetable prices in India," the ministry said in its latest Monthly Economic Report for July, released on Tuesday. However, the report maintained, the recent price surge in certain food items "is expected to be transitory". "Tomato prices are likely to decline with the arrival of fresh stocks by the end of August or early September.
Gold reserves were down by $580 million in the reporting week to $37.440 billion.
India needs to strengthen its economic growth, says IMF.
India's economic growth will be above 6 per cent in the current fiscal as the country has managed to strengthen its macroeconomic stability and performance even in a period of large global shocks, RBI Monetary Policy Committee (MPC) Member Ashima Goyal said on Monday. Goyal further said that a global slowdown reducing India's export growth, geopolitics fueling oil and food prices, and erratic weather are some of the continuing risks that the country faces. "India has managed to strengthen its macroeconomic stability and performance even in a period of large global shocks.
India will grow at around 7.4 per cent in 2022-23 and continue at the same pace in the next year as well, Union Finance Minister Nirmala Sitharaman said on Friday. Sitharaman said there are risks on the external front and this is not the right time to throw caution to the wind, and also assured exporters of all the necessary support from the government as they face the headwinds. Speaking at the FE Best Bank Awards event here, Sitharaman said global agencies like IMF and the World Bank have taken cognisance of the strengths of the Indian economy by saying that it will be among the fastest growing ones in the next two years.
India's inflation trajectory in the coming months will be influenced more by the geo-political situation due to the war in Europe and its impact on supply chains and commodity prices. However, the country is better placed than most to "weather the storm" and achieve growth of close to 8 per cent in the current fiscal year, the finance ministry said in its latest monthly economic report on Thursday. "Through the channel of imports, elevated global crude and edible oil prices now have a significant impact on India's inflation outlook. "Government measures to keep the prices of these commodities in check, along with the recent hike in policy rates by the RBI, are expected to temper inflationary pressures in the economy," the monthly economic report for April, drafted by the finance ministry's economic division, said.
Finance Minister Nirmala Sitharaman will have to do a tight-rope walk between staying fiscally prudent and general public expectations of lower taxes and a wider social security net, while at the same time firing the engines of the economy before general elections. Sitharaman will on Wednesday present her fifth straight Budget at a time when the economy is slowing due to global headwinds and specific sectors need attention. In the run-up to the Budget presentation, expectations are rife that she may tweak income-tax slabs to provide relief to the middle class and increase spending on the poor through programmes such as the rural job scheme while ramping up financial incentives for local manufacturing.
International Monetary Fund (IMF) chief economist Gita Gopinath has made a strong case for regulating cryptocurrencies, saying it will always be a challenge to ban them as they operate from offshore exchanges. Gopinath also suggested a global policy and co-ordinated action for regulating cryptocurrencies. "I think cryptocurrencies are a particular challenge for emerging markets. "It seems to be more attractive to adopt cryptocurrencies and assets in emerging economies than in advanced economies," she said while addressing an event organised by the National Council of Applied Economic Research (NCAER) on Wednesday.
The country's foreign exchange reserves crossed the $600 billion mark for the first time after increasing by $6.842 billion in the week ended June 4, RBI data showed on Friday. The reserves surged to a record $605.008 billion in the reporting week, helped by a rise in foreign currency assets (FCA), a major component of the overall reserves, as per weekly data by the Reserve Bank of India (RBI). In the previous week ended May 28, 2021, the reserves had swelled by $5.271 billion to $598.165 billion.
The world is in the face of a devastating impact due to the coronavirus pandemic and has clearly entered a recession, the International Monetary Fund said on Friday, but projected a recovery next year. "We have reassessed the prospects for growth for 2020 and 2021. It is now clear that we have entered a recession as bad or worse than in 2009. We do project recovery in 2021," IMF Managing Director Kristalina Georgieva told reporters at a news conference.
The biggest risk to India's growth outlook is an escalation of geopolitical tensions, especially if these tensions spread to the Asian region, RBI Monetary Policy Committee (MPC) member Jayanth R Varma said on Wednesday. Varma, in an interview to PTI, said that inflation and inflationary expectations appear to be moderating and high inflation will certainly not become the 'norm' in the country. He is cautiously optimistic about the Indian economy as after the pandemic abated, consumption demand has begun to recover though the recovery is uneven across sectors and industries.
Doggedly persisting with its much-criticised zero-Covid policy, China has slipped deeper into the coronavirus quagmire as it reported a record 31,444 infections on Thursday with many of its cities, including Beijing, resorting to community lockdowns to stem the virus amid worsening wintery weather.
Two-wheeler exports from India fell by 17.8 per cent to 3.65 million units in 2022-23 (FY23), according to data released by the Society of Indian Automobile Manufacturers (Siam) on Thursday. This decline is due to a rise in global inflation and the weakening of economies and currencies in key export markets of Africa, Latin America (LatAm), and South Asia. In contrast to FY23, two-wheeler exports from India jumped 35.4 per cent to 4.44 million units in 2021-22 (FY22).
The silver lining for India's presidency is likely to be the support by almost all G20 countries to its proposal to include the African Union as a permanent member of the bloc that has emerged as perhaps the most influential multilateral forum after the United Nations.
Extreme poverty in India declined by 12.3 percentage points between 2011 and 2019, with rural areas doing better than urban centres, according to a working paper of the World Bank. India has not released a new household consumption survey since the NSS from 2011. By extension, the country has not released any official estimates of poverty and inequality for over a decade now, added the paper co-authored by economists Sutirtha Sinha Roy and Roy van der Weide.
One could argue that India is not troubled in the same way as China is by a declining population and structural problems in real estate/construction and finance. But India has serious trade and fiscal imbalances, and excessive dependence on capital expenditure by the government, points out T N Ninan.
India's growth in the last three financial years has averaged just 1.9%. It is natural to project rapid growth from this low base. Crucial to that would be the assumption that the economy has suffered no lasting damage from the pandemic, observes T N Ninan.
India should give greater priority to markets and trade liberalisation than to capital market liberalisation, a top official of the International Monetary Fund has said.
Finance Minister Ishaq Dar, who presented the budget in the National Assembly, the lower house of parliament, said the government will target a growth rate of 3.5 per cent in the coming fiscal year.
Indian policymakers are almost alone, alongside the United States, in seeking a hard and multi-sectoral global decoupling from China in the expectation that it will boost their economies, observes Mihir S Sharma.
Gold reserves were down by $1.441 billion in the reporting week to $35.999 billion.
Gold reserves were up by $1.525 billion in the reporting week to $37.625 billion.
Notably, Ukrainian forces disabling bridges across the Dnipro river and attacking Russian supply lines made it very difficult for Russia to defend the occupied territory.
The decision by the Reserve Bank of India to introduce a unified regulatory framework on connected lending for all the regulated entities (RE) is expected to reduce the influence of business conglomerates in the Indian lending space, said bankers and experts. "Connected lending pertains to lending to related parties within the same business group. "While the RBI might appear more agreeable to allowing business conglomerates to own banking licenses, it deems it crucial to bolster regulations that would prevent conglomerate-owned banks from gaming the system," said Shivaji Thapliyal, head of research and lead analyst, YES Securities.
The country's foreign exchange reserves swelled by USD 3.005 billion to a lifetime high of USD 490.044 billion in the week ending May 22, mainly on account of a rise in foreign currency assets, RBI data showed on Friday. In the previous week, the reserves had increased by USD 1.726 billion to USD 487.04 billion.
Gold reserves were down by $331 million to $37.264 billion.
Forex reserves include a country's gold holdings and convertible foreign currencies held in its banks, including special drawing rights and exchange reserve balances, with the International Monetary Fund.
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