Fitch Ratings on Tuesday affirmed India's sovereign credit rating at 'BBB-' with a stable outlook, saying the rating derives strengths from the country's robust growth outlook and still-resilient external finances. It said India's robust medium-term growth outlook is a key supporting factor for the rating. A clear improvement in corporate and bank balance sheets, which were under strain prior to the pandemic, is likely to facilitate a steady acceleration in investment in the coming years.
India's services sector activity expanded at the slowest pace in over two years in January amid softer increases in sales and output, a monthly survey said on Wednesday. The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 59.3 in December to 56.5 in January -- its lowest level since November. In the Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.
India is likely to clock a GDP growth of 5.5 per cent during the current financial year provided there is normal monsoon and stable government at the centre, says a D&B report.
Bajaj Finance was the top laggard in the Sensex pack, tanking up to 8 per cent, followed by M&M, Tata Steel, Bajaj Auto, ONGC, HDFC Bank and Kotak Bank. On the other hand, TCS, Tech Mahindra, HUL, Axis Bank and ITC were the top gainers.
BofA Securities has revised its year-end Nifty target from its earlier projection of 16,000 to 14,500 now - down over 6 per cent from the current levels. Fast tightening monetary conditions, slowing growth/fears of US recession and the likely Nifty EPS (earnings per share) cuts, BofA Securities said, are the key headwinds for the markets in the near-term. However, clarity on macro and monetary policy outlook in the US/India, it said, is the silver lining that could see markets bottom out by August/September 2022.
Global trends and trading activity of foreign investors would largely dictate terms in the equity markets this week amid a lack of major domestic triggers, analysts said. Markets may face near-term consolidation due to elevated valuations, they noted. "While the previous week was predominantly shaped by developments in the US Federal Reserve policy, attention will now shift to the Bank of Japan's policy decision on December 19," Santosh Meena, Head of Research, Swastika Investmart Ltd, said.
Dr Nagesh Kumar, one of the three new MPC members, wanted the MPC to reduce the repo rate by 25 basis points to 6.25%.
Indian economy is set for a 'goldilocks' period -- used to describe a timeframe of high growth and low inflation -- while it can become Asia's fastest growing economy in 2016, Japanese financial major Nomura said.
Official data released on Friday said the GDP is estimated to have grown by 5.7 per cent for the April-June period, as against a 4.6 per cent growth notched for the same period year ago.
Government has forecast annual economic growth to rise to 7.4%.
At a pre-Budget meeting, the FM was asked to ensure that NBFCs come out of the liquidity crisis they are facing with the help of RBI. They also spoke about the futility of trying to achieve a 3 per cent fiscal deficit target over the medium term.
A survey by industry body Ficci has lowered the country's economic growth forecast for 2013-14 fiscal to 5 per cent, from 6 per cent projected in July, indicating tough times ahead.
A top panel of economists on Monday slashed its forecast for US economic growth this year, saying the threat of war with Iraq was dampening consumer spending and business activity.
A reading above 50 indicates expansion, while a score below this mark means contraction
IMF Chief Economist Gita Gopinath also said the pickup in global growth for 2020 remains highly uncertain as it relies on improved growth outcomes for stressed economies like Argentina, Iran, and Turkey and for under-performing emerging and developing economies such as Brazil, India, and Mexico.
With economic activity still to reach pre-pandemic levels, the RBI may slow down the pace of rate hikes until next year to quell soaring inflation while supporting growth, the Asian Development Bank (ADB) says in its latest report. The Manila-based multilateral funding agency has raised the inflation forecast for the current fiscal year ending in March 2023 to 6.7 per cent from its earlier projection of 5.8 per cent. For the next fiscal year too, the forecast has been revised upwards to 5.8 per cent from 5 per cent earlier.
Fitch on Tuesday affirmed India's sovereign rating at 'BBB-' with a stable outlook, on robust growth and resilient external finances, but said weak public finances remain a challenge. India's rating has been unchanged at 'BBB-', which is the lowest investment grade, since August 2006. "Fitch Ratings has affirmed India's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook," it said in a statement, adding strong growth potential is a key supporting factor for the sovereign rating.
It would be larger than even in the pandemic year of 2020-2021, notes Mahesh Vyas.
Fitch Ratings on Wednesday said India's high fiscal deficit would pose a challenge in lowering the debt to GDP ratio, which is expected to rise above 90 per cent in the next five years. It said India entered the pandemic with little fiscal headroom from a rating perspective. Its general government debt/GDP ratio stood at 72 per cent in 2019, against a median of 42 per cent for 'BBB' rated peers.
Ahead of the Economic Survey, industry body Ficci today lowered its GDP growth forecast for the current fiscal, pegging India's economic expansion rate at 5.3 per cent compared to its 5.5 per cent previous estimate.
It's always been a struggle for economists and statisticians to forecast India's gross domestic product (GDP) correctly, and say where the economy is headed before the official numbers come out. If estimating the GDP is tough, forecasting it in real time is complicated. It involves looking at tens of indicators, such as industrial production, electricity consumption and exports, to arrive at a number.
Analysts expect modest recovery in Indian economy.
Market breadth remained strong with 1,581 advances over 1,018 declines on the BSE
FM is seen to step up the pace of sales of state assets and curb spending
The government's Rs 20.97 lakh crore COVID-19 package lacks in addressing the immediate concerns of the economy as the actual fiscal impact of the additional stimulus is only about 1 per cent of the GDP as opposed to the claim of 10 per cent, Fitch Solutions said on Tuesday. Prime Minister Narendra Modi on May 12 announced a stimulus package of Rs 20 lakh crore, or nearly 10 per cent of GDP, to deal with the economic fallout of COVID-19. The contents of the package were broad-based and announced in five tranches.
The GST revenues for August 2023 have shown a growth of 11 per cent year on year due to increased compliance and less evasion, Revenue secretary Sanjay Malhotra said on Friday. The collection from Goods and Services Tax (GST) was Rs 1,43,612 crore in August 2022. "Roughly numbers are in the range of 11 per cent year on year growth as in earlier months," Malhotra told reporters.
S&P Global Ratings on Tuesday affirmed India's sovereign rating at the lowest investment grade of 'BBB-' for the 14th year in a row with a stable outlook, and said that the country's strong external settings will act as a buffer against financial strains despite elevated government funding needs over the next 24 months. The sovereign credit ratings on India reflect the economy's above-average long-term real GDP growth, sound external profile, and evolving monetary settings, S&P Global Ratings stated. "India's democratic institutions promote policy stability and compromise, and also underpin the ratings. "These strengths are balanced against vulnerabilities stemming from the country's low per capita income and weak fiscal settings, including consistently elevated general government deficits and indebtedness," it said in a statement. S&P Global Ratings has forecast economic activity in India to begin to normalise throughout the remainder of fiscal 2022, resulting in real GDP growth of about 9.5 per cent.
Moody's expect RBI to hold policy 'repo' rate steady to have a neutral stance in this growth
The country's new economic roadmap highlights the importance of creating a virtuous cycle of investment, savings and exports in order to sustain rapid economic growth over the next five years.
Finance Minister Nirmala Sitharaman is likely to strike a fine balance between being fiscally prudent and growth supportive when she presents her fourth straight budget on Tuesday, which is expected to have plans to boost spending to revive investment and create jobs. The Budget for the fiscal year starting April 1, 2022 is likely to raise spending on infrastructure to set the economy on a firmer footing. The stage for the Budget presentation was set by the Economic Survey stating that the government has the fiscal space to do more to support the economy that is forecast to grow at a healthy 8-8.5 per cent growth in the 2022-23 fiscal.
'The recovery process for the Indian economy would be gradual'.
The employment situation remains dire. Whatever can be done to promote greater low-skill employment should be pursued aggressively, advises former chief economic adviser Shankar Acharya.
After falling 10 per cent against the greenback in 2022, the rupee staged a comeback in 2023 as it appreciated, albeit marginally, on the back of strong portfolio inflows, in addition to timely intervention by the Reserve Bank of India. The Indian unit appreciated by 0.16 percent in six months until June 28. The rupee stood in third place in terms of appreciation against the US dollar among the 12 Asian currencies and in 12th place of the 23 emerging-market currencies.
The Indian economy is likely to grow at over 7 per cent in the current fiscal year, former Niti Aayog vice chairman Arvind Panagariya said on Wednesday, while observing that the growth rate should sustain next year too provided the forthcoming Budget does not have any negative surprises. Panagariya further said recessionary fears have been around for a while but so far neither the US nor the EU has gone into recession. "From the viewpoint of India, in terms of headwinds originating abroad, the worst is probably behind us," he told PTI.
India Inc has an impressive report card to show for the first quarter of this financial year.
The wholesale inflation rose to a 13-month high of 1.26 per cent in April fuelled by rising prices of food articles, especially vegetables, amid expectations of RBI holding interest rates in the policy review next month. The wholesale price index (WPI) based inflation has been rising for two months in a row.
India's services PMI recovered from its ten-month low in September to reach 58.5 in October supported by strong expansions in output and new business, which in turn boosted job creation, a monthly survey said on Wednesday. The seasonally adjusted HSBC India Services Business Activity Index increased from 57.7 in September to 58.5 in October, as robust sales pipelines and strong demand conditions supported the upturn in business activity. In the Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion, while a score below 50 denotes contraction.
The world's biggest lockdown that shut a majority of the factories and businesses, suspended flights, stopped trains and restricted movement of vehicles and people, may have cost the Indian economy Rs 7-8 lakh crore during the 21-day period, analysts and industry bodies said.
