Tag: indian economy

India to become world's third-largest economy by FY28 : IMF

India to become world's third-largest economy by FY28 : IMF
Friday, October 14, 2022
$4.94 trillion that year. The following year, India’s economy would hit the $5.36-trillion mark, higher than Japan’s at $5.17 trillion. That year, India would become the third-largest economy. The size of India’s economy was $3.18 trillion in 2021-22 (FY22), while Britain’s was $3.19 trillion in 2021, according to the flagship publication by the Fund. The size of India’s economy is calculated on a financial year basis (April to March). For other economies, it is on a calendar year basis. Earlier, there was a Bloomberg report that stated that India has overtaken the UK in the fourth quarter of FY22, basing it on World Bank data. However, that comparison was made on quarterly figures, not yearly. Read more

India's FY23 GDP growth at 7.3% and inflation above 6%: S&P Global Ratings projection

India's FY23 GDP growth at 7.3% and inflation above 6%: S&P Global Ratings projection
Monday, September 26, 2022
S&P Global Ratings projected India's economic growth at 7.3% in the current fiscal with downside risks and said inflation is likely to remain above RBI's upper tolerance threshold. S&P Global Ratings today( 26 September 2022) projected India's economic growth at 7.3 percent in the current fiscal with downside risks and said inflation is likely to remain above RBI's upper tolerance threshold of 6 percent till the end of 2022. In its Economic Outlook for the Asia Pacific, S&P said India's growth next year will get support from domestic demand recovery after the coronavirus pandemic. "We have retained our India growth outlook at 7.3 percent for the fiscal year 2022-2023 and 6.5 percent for the next fiscal year, although we see the risks tilted to the downside," it said. Read more

Working on road map to advanced economy: FM Nirmala Sitharaman

Working on road map to advanced economy: FM Nirmala Sitharaman
Tuesday, September 6, 2022
“The next 25 years will be very critical for India. We have to work towards maintaining the growth momentum. So together with the central bank, the ministry of finance will be working out a pathway which will be predictable and consistent and which will give every stimulus required for growth of the Indian economy,” Sitharaman said while speaking at an event organised by Elara Capital. Prime Minister Narendra Modi in his address to the nation on August 15 had called upon citizens to make India a developed nation when it celebrates 100 years of Independence in 2047. Read more

India's GDP is estimated to rise 15.4% in the three months to June from a year ago-Bloomberg survey

India's GDP is estimated to rise 15.4% in the three months to June from a year ago-Bloomberg survey
Tuesday, August 30, 2022
Last quarter economy of India probably grew at the fastest rate in a year driven by healthy consumption, but the pace of expansion is seen slowing as policymakers prioritize rising prices overgrowth. Gross domestic product is estimated to rise 15.4% in the three months to June from a year ago, according to a Bloomberg survey of economists. That’s the fastest reading since the April-June quarter of 2021 and compares with a 4.09 expansion in the previous three months. Read more

India's services activity touches an eleven-year high of 59.2 in June

India's services activity touches an eleven-year high of 59.2 in June
Tuesday, July 5, 2022
In June 2022 India’s services activity expanded at the fastest pace in eleven years. Rising from 58.9 in May to 59.2 in June, the seasonally adjusted S&P Global India Services PMI Business Activity Index was at its highest mark since April 2011. The June data pointed to further accelerations in new business growth and output at Indian services companies amid ongoing improvements in demand conditions. Although firms expect the recovery to be sustained over the coming 12 months, concerns surrounding price pressures restricted business confidence. Input costs continued to rise at a historically elevated pace, although one that was the slowest in three months, while charge inflation hit a near five-year high. Read more

India facing twin deficit problem due to commodity prices, subsidy: FinMin

India facing twin deficit problem due to commodity prices, subsidy: FinMin
Tuesday, June 21, 2022
The finance ministry yesterday(20 June 2022) cautioned the re-emergence of the twin deficit problem in the economy, with higher commodity prices and rising subsidy burden leading to an increase in both fiscal deficit and current account deficit. It’s also the first time the government has explicitly talked about the possibility of fiscal slippage in the current fiscal year. Read more

Fitch revised the outlook on India's long-term foreign-currency IDR from “negative” to “stable”

Fitch revised the outlook on India's long-term foreign-currency IDR from “negative” to “stable”
Friday, June 10, 2022
Fitch Ratings has revised the outlook on India's long-term foreign-currency Issuer Default Rating (IDR) from “negative” to “stable” on diminished downside risks to medium-term growth. It affirmed the IDR at 'BBB-'. The revision in outlook reflects India's rapid economic recovery and easing financial sector weaknesses, despite near-term headwinds from the global commodity price shock. “We expect robust growth relative to peers in order to support credit metrics in line with the current rating,” Fitch said in a statement. Read more

India's $5-trillion economy dream not before FY29: IMF data

India's $5-trillion economy dream not before FY29: IMF data
Tuesday, May 3, 2022
According to the International Monetary Fund (IMF), the wait for India to become a $5-trillion economic powerhouse by 2024-25 (FY25) is going to take longer than what the finance ministry had originally intended. The vision will instead be achieved in 2028-29 (FY29), revealing the IMF data, illustrating a four-year delay. Chief Economic Advisor (CEA) V Anantha Nageswaran had in February said India would become a $5-trillion economy by 2025-26 or the following year, on the back of an 8-9 percent sustained growth rate in the real gross domestic product (GDP). Read more

Indian economy looks better than others, but uncertainty ahead

Indian economy looks better than others, but uncertainty ahead
Saturday, April 16, 2022
The Indian economy looks better than almost any other, according to some positive thinking analysts. If you consider prices, consumer price inflation in the US is at 8.5 percent, a 40-year high. In the euro area, it is 7.5 percent. These are economies used to inflation averaging less than 2 percent. Here in India we may groan over rising petrol and diesel costs and some spectacular price tags on individual food items. Naturally, criticism of the RBI has grown for not having placed greater emphasis much earlier on controlling inflation, which is now well above the target range. Still, India’s consumer price inflation is moderate at fractionally under 7 percent. Compared with the Brics economies, Brazilian inflation is in the double-digits at 11.3 percent, as is Russia’s at 16.7 percent. Only China has the inflation beast virtually slain, breathing slowly at just 1.5 per cent. (All numbers are as compiled by The Economist) Read more

India's services sector expands at fastest pace

India's services sector expands at fastest pace
Wednesday, April 6, 2022
The services sector in India expanded at its fastest pace so far this year in March as an easing of Covid-19 restrictions boosted demand, but elevated inflationary pressures clouded business confidence, a private survey showed. The S&P Global India Services Purchasing Managers' Index rose to 53.6 in March from 51.8 in February, beating the 52.5 estimates in a Reuters poll. While the index remained above the 50-mark separating growth from contraction for an eighth straight month, input costs rose at the sharpest pace in 11 years. Higher chemical, fuel, raw materials, retail, transportation, and vegetable prices increased operating expenses, dampening business confidence. Domestic demand increased on high footfall, leading to rising sales and pushing the new business sub-index to a three-month high. However, international demand contracted at its sharpest rate in six months as the Russia-Ukraine war-affected supply chains. Read more

Fitch reduces FY23 India growth forecast to 8.5%

Fitch reduces FY23 India growth forecast to 8.5%
Tuesday, March 22, 2022
With the Omicron wave subsiding quickly, containment measures have been scaled back, setting the stage for a pick-up in GDP growth momentum in the June quarter this year, the agency said. It has revised upwards the GDP growth forecast for the current fiscal by 0.6 percentage points to 8.7 percent. "However, we have lowered our growth forecast for FY 2022-2023 to 8.5 percent (-1.8 pp) on sharply higher energy prices," Fitch said while revising up its inflation forecasts. In its Global economic Outlook-March 2022, Fitch said the post-COVID-19 pandemic recovery is being hit by a potentially huge global supply shock that will reduce growth and push up inflation. Read more

India's growth will be adversely affected by Russia-Ukraine war

India's growth will be adversely affected by Russia-Ukraine war
Monday, March 7, 2022
India's growth in the next financial year will be adversely affected by factors like Supply disruptions and trade shocks emanating from the Russia-Ukraine conflict, a possible sharp rise in inflation in the next 6-8 months, fiscal pressures, and a widened current account deficit (CAD). Growth is expected to be less than 8% in FY23, economists said as they pitched for a cut in excise duties on oil to cushion the impact on inflation. The Economic Survey had forecast 8-8.5% growth in FY23 at the end of January, days after the International Monetary Fund (IMF) had pegged India's gross domestic product (GDP) growth for the year at 7.1%. Oil prices have hit their highest levels in almost a decade.HDFC Bank expects FY23 CAD at 2.3% and has lowered its FY23 growth forecast to 7.9% from 8.2% projected earlier. Read more

Indian economy was growing steadily before Omicron hit

Indian economy was growing steadily before Omicron hit
Tuesday, December 28, 2021
In the month of November that saw the omicron variant of coronavirus induce fresh concerns about risks to the recovery, India’s economy was expanding at a steady pace. All eight high-frequency indicators tracked by Bloomberg News were steady last month, keeping the needle on a dial measuring the so-called ‘Animal Spirits’ unchanged at 5. The level was arrived at by using the three-month weighted average readings to smooth out volatility in the single-month scores. But the pace of activity based on indicators from demand for services to factory output-faces threats from rising cases of the omicron variant first detected in South Africa toward the end of last month. While the Reserve Bank of India this month kept its full-year growth forecast steady at 9.5%, Governor Shaktikanta Das sounded cautious, saying “it is too premature to gauge” the effects of the new strain at this stage. Read more

Nomura's outlook for India reg.economy,markets and investing strategy in 2022

Nomura's outlook for India reg.economy,markets and investing strategy in 2022
Friday, December 10, 2021
Most brokerages, including Nomura, had downgraded Indian equities in October 2021. Heading into 2022, a change in policy stance by the US Federal Reserve (US Fed), inflation risk, and the new Covid variants are some of the risks that will impact the global economy and financial markets, including India, Nomura said. Despite these headwinds, Nomura expects Asian stocks to deliver double-digit returns by end-2022 (base case end-2022F MXASJ target is 925; around 18 percent higher from the current levels), driven largely by earnings growth and flat multiples from a low base. “Material declines for Asia stocks are unlikely, as we see several buffers this time (valuations, positioning, fundamentals). Peaking US inflation, and the bottoming out of growth and modest policy easing in China into Q1-2022 should provide relief for Asia stocks eventually,” Nomura said. Read more

The Indian economy is picking up leaving behind the shadow of the pandemic: RBI report

The Indian economy is picking up leaving behind the shadow of the pandemic: RBI report
Tuesday, October 19, 2021
The Indian economy is picking up leaving behind the shadow of the pandemic as consumer demand improves and supply constraints ease due to strong Kharif agricultural production and revival in manufacturing and services. Also, softer food prices are aligning headline inflation closer to the target of 5.3 percent for FY'22. "The green shoots of revival have spilled out of the high-frequency indicators and on to the headline metrics in a recovery that is progressively solidifying," the report said. RBI's Economic Activity Index (EIA) indicates that real GDP grew by 9.6 percent in July-September 2021

Service activities decline for 3rd straight month in July due to Lockdown

Service activities decline for 3rd straight month in July due to Lockdown
Wednesday, August 4, 2021
The biggest sector of India's economy, Services, continued to contract for the third month in a row in July due to restrictions imposed by state governments to arrest the spread of the Covid-19 pandemic according to a widely tracked IHS Markit purchasing managers' index (PMI) survey. Business activity, new orders, and employment declined in July, according to a commentary associated with the survey. The latest data also pointed to an intensification of inflationary pressures across the sector, it said. New work intakes also fell for the third month running in July, albeit at a softer pace than in June. In addition to challenging conditions domestically, firms observed a further deterioration in international demand for services. New business from abroad decreased at a sharp pace that was little changed from June. Read more

RBI's Monetary Policy Committee expected to hold rates and continue with an accommodative stance to encourage growth

RBI's Monetary Policy Committee expected to hold rates and continue with an accommodative stance to encourage growth
Thursday, June 3, 2021
The RBI is expected tomorrow(4th June 2021) to hold interest rates after a three-day meeting of its Monetary Policy Committee (MPC). The policy will likely maintain an accommodative stance, as helping economic growth remains a priority. Here are key decisions to look at from the review meeting: The market will look out for RBI’s GDP growth forecast for the financial year. In the last policy review meeting of April, GDP growth for the current financial year was projected at 10.5%. For the first quarter, it was projected at 26.2%. The prediction was before the second wave of the coronavirus pandemic that has hurt economic activity due to lockdowns by state governments. Most economists and rating agencies have trimmed their forecasts following the second wave. Many see GDP growth for FY22 in single-digit now, as compared to double-digit predictions made before the second wave. Read more

Indian economy is on track to grow 10% in the year that began April 1st

Indian economy is on track to grow 10% in the year that began April 1st
Monday, May 31, 2021
The resilience of the Indian economy will be tested by its ability to overcome a devastating outbreak of Covid-19, although no one is yet doubting its potential to pull off the world’s fastest pace of growth among major economies this year. The economy is on track to grow 10% in the year that began April 1, according to the median of 12 estimates compiled by Bloomberg News. That’s after several economists downgraded their forecasts in recent weeks to factor in local curbs on activity, including in India’s political and commercial hubs. Economists say the relaxation of restrictions across states will determine the strength of the rebound, while the willingness of consumers to spend will also be key. Data likely to be released today(31st May 2021) will probably show gross domestic product grew 1% in the three months ended March, making it the second straight quarter of expansion since India exited a rare recession. Read more

Barclays pegs India's FY22 GDP growth at 7.7%

Barclays pegs India's FY22 GDP growth at 7.7%
Tuesday, May 25, 2021
Barclays, as measured by gross domestic product (GDP) has pegged India’s economic growth -for fiscal 2021-22 (FY22) – at 7.7 percent in the bear-case scenario, if the country is hit by the third wave of the Covid pandemic going ahead. The economic cost, it believes, could rise by at least a further $42.6 billion, assuming another round of similar stringent lockdowns is imposed across the country for eight weeks later this year. After factoring in recent developments, Barclays has pegged the economic cost of the latest shutdowns at $8 billion per week in May, up from $5.3 billion per week in the last two weeks of April, and well above the $3.5 billion a week estimated early in the second wave. “We believe these economic losses will remain steady at $8 billion a week through the month of May but expect them to ease from June,” Barclays said. Read more

India's manufacturing sector activity was largely flat in April

India's manufacturing sector activity was largely flat in April
Monday, May 3, 2021
Manufacturing sector activity in India was largely flat in April, as rates of growth for new orders and output eased to eight-month lows amid the intensification of the COVID-19 crisis, a monthly survey said today(3rd May 2021). The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) was at 55.5 in April, little changed from March's reading of 55.4. "The PMI results for April showed a further slowdown in rates of growth for new orders and output, both of which eased to eight-month lows amid the intensification of the COVID-19 crisis," said Pollyanna De Lima, Economics Associate Director at IHS Markit. Lima also noted that "the surge in COVID-19 cases could dampen demand further when firms' financials are already susceptible to the hurdle of rising global prices." On the prices front, survey participants also signaled a steep increase in input costs, the quickest since July 2014, and upward revisions to selling prices. Read more

GST collection for April 2021 sets new record (Rs.1.41 trillion)

GST collection for April 2021 sets new record (Rs.1.41 trillion)
Saturday, May 1, 2021
Surpassing the previous high in March, GST collections in the month of April set another fresh record at Rs 1.41 trillion, according to the government data released today(1st May 2021). April month's GST revenues are about 14 percent higher when compared with the collections of the previous month. GST collections have consistently crossed Rs 1 trillion marks for the last seven months. "Despite the second wave of coronavirus pandemic affecting several parts of the country, Indian businesses have once again shown remarkable resilience by not only complying with the return filing requirements but also paying their GST dues in a timely manner during the month," the government said in an official statement. During April, the revenues from the domestic transactions (including import of services) are 21 percent higher than the revenues from these sources during the last month. Read more

India's coronavirus crisis may derail the world economy

India's coronavirus crisis may derail the world economy
Saturday, May 1, 2021
The second wave of the COVID-19 pandemic has struck India with a devastating impact. With over 300,000 new cases and 3,000 deaths across the country each day at present, the total number of deaths has just passed the 200,000 mark – that’s about one in 16 of all COVID deaths across the world. There is now a humanitarian crisis of significant proportions. India is a country of 1.4 billion people and makes up a sixth of the world’s population. Hence it is also most likely going to affect the world economy. India is itself the fifth largest economy in the world. With relatively high growth rates (of between 4% and 8%) and its large size, it has a significant impact on the world economy. Read more

Economists tweak their GDP projections for FY22 due to Lockdown and mobility curbs

Economists tweak their GDP projections for FY22 due to Lockdown and mobility curbs
Wednesday, April 28, 2021
Recent lockdown and mobility curbs in more Indian cities – have led to economists tweak their gross domestic growth (GDP) projections for fiscal 2021-22 (FY22). In a recent note, those at IHS Markit suggest that they expect the Indian economy (as measured by GDP) to grow at 9.6 percent in FY22. Maharashtra’s lockdown, it said, represents a significant dampener on growth, as the state accounts for 16 percent of the national GDP. “IHS Markit forecasts 9.6 percent real GDP growth in FY 2021, though the wider restrictions forecast above indicate that there is scope for further reductions in economic growth, as these measures would mean income and job losses for workers alongside significant output and revenue losses for firms, particularly in the services sector and the informal economy,” wrote Deepa Kumar, deputy head, Asia-Pacific, IHS Markit. Read more

India’s double-digit growth forecast in risk

India’s double-digit growth forecast in risk
Monday, April 26, 2021
Fifteen days back, the International Monetary Fund upgraded India’s economic growth forecast to 12.5% -- the quickest rate among major economies. Now, as Covid-19 cases surge the most globally, that bullish view is looking increasingly in doubt. In Delhi, India’s political capital, the streets are mostly empty and the markets nearly deserted with almost all shops closed in response to curbs put in place by the local administration to fight the pandemic. The scene is not so different in Mumbai, the financial hub. Aimed at controlling the COVID-19 spike, the Karnataka government today announced "close down" across the state for 14 days from Tuesday(27th April 2021) night. High-frequency data are already pointing to a deepening contraction in retail activity in the week through April 18 relative to its pre-pandemic January 2020 level, said a Bloomberg Economist. That’s a key risk for an economy where consumption makes up some 60% of gross domestic product.

Covid second wave may not dent FY22 earnings: Analysts

Covid second wave may not dent FY22 earnings: Analysts
Tuesday, April 20, 2021
Despite the sharp rise in Covid cases and the ensuing lockdown imposed in some important cities across India that can dent the economic momentum, analysts remain optimistic on the earnings trajectory of India Inc and have not yet downgraded / cut projections for fiscal 2021-22 (FY22). “Corporate earnings are yet to come back to their pre-Covid levels in realistic terms even though they may look optically higher due to the low base effect of the last year. Despite the recent lockdown measures, the companies engaged in essential services continue to run. The curbs can, at best, slow the earnings growth for a couple of months. I do not see any major impact on FY22 numbers at an aggregate level as of now,” say experts. Read more

RBI governor is optimistic about the growth prospects of the economy

RBI governor is optimistic about the growth prospects of the economy
Monday, March 8, 2021
RBI governor Shaktikanta Das in an interview with TOI said that savers can look at various small savings schemes for better returns while asserting that inflation management remains a top priority. He said equity investors must be judicious and not get carried away by short-term trends. Growth impulses are gradually and steadily getting broad-based. The high-frequency indicators such as steel consumption, PMI for manufacturing and services are expanding, GST collections and e-way bills are showing improvement. Earlier, there was an impression that it was due to pent-up and festival demand. But now, it is genuine demand that is visible. The vaccination drive is giving greater confidence to consumers, so the demand is expected to sustain. The only downside risk is the recent spike in the number of Covid cases in certain parts of the country. With daily vaccination numbers going up, we should be able to contain a further spike. Read more

GDP and GVA giving conflicting signals on economic recovery during FY21?

GDP and GVA giving conflicting signals on economic recovery during FY21?
Monday, March 1, 2021
In India, the GDP and the gross value added (GVA) seem to be giving conflicting signals on economic recovery during FY21. This happens because of the definition of these two numbers. For instance, GDP was projected to fall by 8 percent in the fiscal year 2020-21 (FY21) by the second advance estimates (AE), sharper than 7.7 percent by the first one. On the other hand, GVA is projected to fall 6.5 percent in the second estimate. The first estimates pegged the figure at less than 7.2 percent. Also, while GDP was projected to fall 1.1 percent in Q4, GVA was forecast to grow by 2.5 percent in the same quarter by the second AE. This mismatch happens due to a change in the definition of GDP in 2015 with effect from 2012-13 on the base year 2011-12. The revised method of GDP did not only change the base year, but also the way it is computed. Read more

Private sector investments will pick up soon, say experts

Private sector investments will pick up soon, say experts
Saturday, February 27, 2021
Investments in India grew after a gap of three quarters, driven by the government, while demand contracted for the third consecutive quarter during October-December (Q3) of the financial year 2020-21 (FY21). Even then, investments remained subdued, growing by a marginal 2.56 percent in Q3FY21. It had started declining even before the pandemic started impacting India’s economy. Gross fixed capital formation (GFCF) contracted by 6.48 percent in Q4FY20. It plunged in Q1FY21 before returning to earlier levels in Q2. according to experts investments in Q3 were driven purely by the government. This is backed up by the data from the Centre for Monitoring Indian Economy (CMIE), which showed that investments in new projects declined to Rs 0.91 trillion in Q3, compared with Rs 1.15 in Q2. Investment activity reverted to growth, supported by high levels of public investment spending, said Rahul Bajoria, chief economist at Barclays India. Read more

India may beat recession even as new virus cases loom

India may beat recession even as new virus cases loom
Friday, February 26, 2021
some of the gains. However, Data shows gross domestic product expanded 0.6% in the three months ended December, after contracting for two consecutive quarters, according to the median forecast in a Bloomberg survey of economists. That will help Asia’s third-largest economy exit an unprecedented recession. India will become one of the few major economies to post growth in the last quarter of 2020, with any improvement in the economy’s performance inversely tied to a drop in Covid-19 infections. But the nation has seen an uptick in cases over the last few weeks raising the risk of a new round of localised lockdowns. New curbs on the movement of people or restrictions on businesses are a risk to the nascent recovery, given that gains in the October-December quarter probably came from the reopening of the economy, which is primarily driven by domestic consumption. The government also boosted spending in the final months of last year to spur growth. Read more

Nomura ups rating on Indian equities to overweight in Asia

Nomura ups rating on Indian equities to overweight in Asia
Thursday, February 18, 2021
Nomura has raised its rating on Indian equities to ‘overweight’ in its Asia ex-Japan portfolio. Nomura is now much less concerned about two of the central issues that plagued India – India’s limited fiscal space and vulnerability from Covid-19. The recent developments, it said, have surprised them. However, Nomura does caution that the execution of Budget and other policy proposals remains one of the key risks. “A number of recent positive developments in India lead us to change our stance to an Overweight (from Neutral) in our regional Asia-ex-Japan (AeJ) allocation. We view India as a counterweight to North Asia as a large liquid market that – despite its strong run recently – does provide a hedge in portfolios. We are modestly reallocating to India from Korea – although we remain Overweight on Korea (alongside China and Indonesia),” wrote Chetan Seth and Nirransh Jain of Nomura in a February 17 co-authored report. Read more

Sharper-than-expected economic recovery can fuel further rally in domestic cyclicals, industrials, and financials

Sharper-than-expected economic recovery can fuel further rally in domestic cyclicals, industrials, and financials
Wednesday, February 17, 2021
Investors are now betting big on cyclical recovery after a sharp economic contraction with most of the related stocks doing well at the bourses after playing safe during the initial phase of the pandemic in 2020 and sticking to defensive plays such as pharmaceuticals, fast-moving consumer goods (FMCG) and information technology (IT). Till June-July, defensive sectors like pharma and FMCG were leaders, followed by IT, as investors wanted to play safe given the uncertainty around the pandemic, its impact on the economy, and the fortunes of India Inc, analysts say. From August – September, cyclical like auto and banking & financials picked up the pace. Post budget, infrastructure, industrials, and stocks of public sector undertakings (PSUs) have rallied. Read more

Budget 2021 LIVE: FM arrives at North Block; all eyes on high stakes Budget

Budget 2021 LIVE: FM arrives at North Block; all eyes on high stakes Budget
Monday, February 1, 2021
Finance Minister Nirmala Sitharaman will present her third Union Budget in Parliament at 11 am today. The Budget speech will be keenly watched not only by the domestic and foreign investors but also by various interest groups like farmers, anxious middle class, and corporate entities. As the Covid-19 pandemic hit India last year, the government witnessed a rising expenditure and tumbling revenue, even as at one stage economic activity came to a standstill due to the pandemic-induced lockdown. However, the economy is now in a recovery mode. On Friday,29th January 2021 the government tabled the Economic Survey 2020, which pegged India's real GDP growth at 11 percent in FY22. Meanwhile, the finance minister has promised a 'Budget like never before'. Read more

December wholesale inflation slows to 1.22% in India

December wholesale inflation slows to 1.22% in India
Thursday, January 14, 2021
The wholesale price-based inflation slowed to 1.22 percent in December on easing food prices, as per government data released today(14th January 2020). The inflation based on the Wholesale Price Index (WPI) was 1.55 percent in November 2020, and 2.76 percent in December 2019. The rate of inflation based on the WPI Food Index decreased from 4.27 percent in November 2020, to 0.92 percent in December 2020, as per the data released by the Department for Promotion of Industry and Internal Trade. It is to be noted here that retail inflation had also dropped sharply to 4.59 percent in December, mainly due to declining food prices.

Indian economy witnessing 'V-shaped' recovery since June: FinMin

Indian economy witnessing 'V-shaped' recovery since June: FinMin
Tuesday, January 5, 2021
According to a Finance Ministry report India has been witnessing a 'V-shaped' recovery since June with the gradual easing of restrictions on economic activities." The sustained improvement in high-frequency indicators ignite optimism of improved performance in the second half of the year," it said. The Monthly Economic Recovery for December by the Department of Economic Affairs (DEA) also noted that the impending vaccination is set to spur the momentum in economic activity globally. "The effective management of Covid-19 spread despite the festive season and onset of the winter season, combined with sustained improvement in high-frequency indicators and V-shaped recovery along with easing of lockdown restrictions distinguish Indian economy as one riding against the Covid-wave," it said. Read more

Manufacturing sector activities showed a marginal improvement in December

Manufacturing sector activities showed a marginal improvement in December
Monday, January 4, 2021
Indian manufacturing sector activities showed a marginal improvement in December compared to the previous month even as employment generation remained low, showed the widely-tracked IHS Markit purchasing managers' index (PMI) survey. PMI inched up to 56.4 in December compared to 56.3 in November. However, it remained lower than 58.9 in October and 56.8 in September, the two months during which the economy saw a gradual lifting of lockdowns. A reading above 50 shows growth, while the print below 50 means contraction. Reflecting the loosening of Covid-19 restrictions, strengthening demand, and improved market conditions, factory orders increased during December. In response, firms lifted production again. In both cases, rates of expansion remained sharp despite easing to four-month lows. Read more

Indian economy's animal spirits soar

Indian economy's animal spirits soar
Wednesday, October 28, 2020
The economy in India picked up speed in September as a revival in demand and business activity helped drive the nation toward recovery from the pandemic-induced slump. Five of the eight high-frequency indicators, including exports, tracked by Bloomberg News improved last month, while three were steady. That helped move the needle on a dial measuring the so-called ‘Animal Spirits’ to 5 from 4 in August -- a level arrived at by using the three-month weighted average to smooth out volatility in the single-month readings. Economists, including those at the Reserve Bank of India, attributed the recovery to pent-up demand after a strict lockdown imposed in March to contain the coronavirus outbreak hit the consumption of goods and services. While inventory re-stocking will underpin business activity in the coming months, the improvement might still not be enough to prevent Asia’s third-largest economy from contracting in the financial year to March 2021. Read more

Indian economy saw growth rebound through Q2FY21: Nomura

Indian economy saw growth rebound through Q2FY21: Nomura
Tuesday, October 27, 2020
The Indian economy saw growth rebound through the second quarter of the ongoing fiscal with gross domestic product (GDP) contraction likely to have narrowed to -10.4% from the sharp -23.9% seen in the previous quarter, according to Nomura. The Nomura Monthly Activity Indicator, which takes into account high-frequency indicators from across sectors, improved to -8.6% year-on-year in September from -19.7% in August and a record low of -37.8% in June, “implying a swift GDP growth rebound”, the firm said in a report today. In the run-up to the festive season, aggregate demand recovered to 77% of normal in September against 71% recorded in the month earlier while aggregate supply picked up to 92% of normal in September against 86% in August, it said.

Indian economy to bounce back with 8.8% growth in 2021 after contracting by 10.3% in 2020

Indian economy to bounce back with 8.8% growth in 2021 after contracting by 10.3% in 2020
Wednesday, October 14, 2020
The International Monetary Fund (IMF) yesterday (13th October 2020) slashed the growth forecast for India saying that the country’s economy will contract 10.3% in FY21, the third steepest decline after Spain and Italy, and the sharpest fall among emerging markets and developing countries. This is the second downgrade for India by IMF after it reversed its forecast of 1.9% growth in April to a 4.5% contraction in June for 2020-21. The economies of Spain and Italy are seen shrinking by 12.8% and 10.6%, respectively. IMF’s forecast for the Indian economy is gloomier than the Reserve Bank of India’s projection of a 9.5% contraction in the real gross domestic product (GDP) in the full fiscal. The economy shrank an unprecedented 23.9% in the June quarter. Last week, the World Bank said the situation in India is worse than ever, forecasting the country’s economy will shrink 9.6% in FY21, much steeper than the 3.2% fall estimated by IMF in June. Read more

India’s economy showed signs of stabilising

India’s economy showed signs of stabilising
Friday, September 25, 2020
In August India’s economy showed signs of stabilising with manufacturing and services gradually improving even as coronavirus cases escalated across the country. Five of the eight high-frequency indicators compiled by Bloomberg News gained last month, while two were unchanged and one deteriorated. That kept the needle on a dial measuring so-called animal spirits steady at 4 -- a level arrived at by using the three-month weighted average to smooth out volatility in the single-month readings. A strong rebound is still a far way off though as a surge in virus cases continues to disrupt activity and has led many economists to downgrade their growth forecasts for the year. Read more

MARKET UPDATE:Sensex climbed 450 points to reclaim 39,000-level and Nifty testing the 11,500-mark

MARKET UPDATE:Sensex climbed 450 points to reclaim 39,000-level and Nifty testing the 11,500-mark
Tuesday, September 1, 2020
The historic fall in Q1 GDP growth did not dampen the sentiment of investors who sent the benchmark indices near a percent higher in today's (1st September 2020) early deals ahead of the Supreme Court's verdict on AGR. The S&P BSE Sensex climbed 350 points, or 0.92 percent, and reclaimed the 39,000-level and the Nifty50 index was testing the 11,500-mark. IndusInd Bank (up 4%), Tata Steel, State Bank of India, and Bajaj Finance (all up 2%) were the top Sensex gainers. On the other hand, ONGC dipped 3 percent. The Supreme court is set to deliver decisions on three key issues: the tenure for staggered payment of AGR dues, whether or not Reliance Jio has to pay the hefty AGR dues bill of Rcom, and Bharti Airtel, that of Aircel and Videocon. And three, whether banks can, as creditors, transfer spectrum to a new buyer under IBC, without first taking cognizance of the dues of the government. Read more

Indian economy will take longer to recover: RBI

Indian economy will take longer to recover: RBI
Tuesday, August 25, 2020
stimulus measures once the cure to Covid-19 is found, the report adds. High-frequency indicators so far pointed to a “retrenchment in activity that is unprecedented in history,” the annual report said, adding, “the improvements that became visible in May and June after the lockdown was eased in several parts of the country, appear to have lost strength in July and August, mainly due to reimposition or stricter imposition of lockdowns, suggesting that contraction in economic activity will likely prolong into the second quarter.” The central bank noted that the shock to consumption is severe, and it will take quite some time to mend and regain the pre-pandemic momentum. Read more

The Indian economy may contract16.5 % in Q1FY21, as against previously expected contraction of 20%

The Indian economy may contract16.5 % in Q1FY21, as against previously expected contraction of 20%
Monday, August 17, 2020
There is a small Silverline for the Indian economy. It may report a contraction of16.5 percent in April-June quarter of FY21, as against a previously expected contraction of 20 percent, as degrowth in corporate GVA, courtesy better-than-expected results of some financial and non-financial companies have been significantly better than revenue degrowth in Q1FY21, said economists at SBI. "In May, we had indicated that the Q1FY21 GDP growth will exhibit a sharp decline at least in excess of 30 percent. However, the current situation warrants us to revisit our GDP growth... In principle, the revenue decline of listed companies has been far outstripped by cost rationalisation thereby not impacting margins. As per our estimates, Q1FY21 real GDP degrowth would be now around –16.5 percent," Soumya Kanti Ghosh, chief economic advisor for SBI wrote in his latest report Ecowrap, dated August 17. The government is expected to release Q1FY21 GDP data on August 31. Read more

Manmohan Singh offers three remedies to help to restore the country’s financial health

Manmohan Singh offers three remedies to help to restore the country’s financial health
Monday, August 10, 2020
Former prime minister Manmohan Singh and world-renowned economist has proffered three steps to restore the country’s financial health. Singh, a long-time Congress stalwart who is often credited as the architect of India's economic reforms program, suggested direct cash assistance to protect livelihoods and retain spending power, government-backed credit guarantee schemes to make capital available for businesses, and institutional autonomy to fix the financial sector. "I do not want to use words like 'depression' in a cavalier fashion," said Singh in a conversation with the BBC, adding that a deep and prolonged economic slowdown was inevitable. Read more

Disparity between rallying global stocks and deteriorating data is the most pronounced in India

Disparity between rallying global stocks and deteriorating data is the most pronounced in India
Wednesday, August 5, 2020
The Indian shares have logged one of the best rebounds from the March lows globally while battling some of the world’s worst economic data. The surge has pushed up valuations to a record as investors look past the grim reality and the world’s third-highest tally in coronavirus cases. The disconnect between rallying global stocks and deteriorating data is very much pronounced in India. The situation does not go well for Asia’s third-largest economy that’s set for its first contraction in more than four decades. Further negative surprises from macro data or virus cases can unravel a rally that’s added $605 billion in market value from the depths of the swoon to outstrip the government’s stimulus package. Read more

India's economic growth falls for a third successive year, fiscal deficit widens to 4.6%

India's economic growth falls for a third successive year, fiscal deficit widens to 4.6%
Saturday, May 30, 2020
The central govt has officially admitted that the fiscal deficit last year was as large as 4.6 percent of gross domestic product (GDP), much wider than the 3.8 percent provided in the Budget presented in February earlier this year. On the economy front, the provisional estimates released on Friday showed that the rate of growth in India’s GDP fell steeply to 4.2 percent in 2019-20 from 6.1 percent in 2018-19. Look at it another way, the rate of growth for India’s GDP has more than halved in just three years – from 8.2 percent recorded in 2016-17, the year of demonetization. There was no respite in 2017-18, either, when the GDP grew by only 7 percent. Read more

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