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India's economy is expected to grow at 7-7.2 per cent in the current fiscal year driven by robust economic fundamentals and continuity in domestic policy reforms, <keyword id="20006170" type="General" weightage="100" keywordseo="Deloitte-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Deloitte India" meta.hostid="261" meta.entityid="Deloitte India">Deloitte India</keyword> said on Monday. The August update of <keyword id="19896400" type="General" weightage="20" keywordseo="deloitte" source="keywords">Deloitte</keyword>'s India Economic Outlook said several initiatives in the <keyword id="19908389" type="General" weightage="20" keywordseo="union-budget" source="keywords">Union Budget</keyword> 2024-25 toward improving agriculture productivity, creating jobs for the youth, and in manufacturing and addressing the challenge of access to finance for micro, small, and medium enterprises (MSMEs), would help improve supply-side demand, curb inflation, and prop up <keyword id="20139791" type="General" weightage="20" keywordseo="consumer-spending" source="keywords">consumer spending</keyword>, especially in rural areas. Deloitte India Economist Rumki Majumdar said, India will witness robust growth in the second half after a period of uncertainty in the first six months of the year. "Key contributing factors include the continuity in domestic policy reforms, reduced uncertainties in the US post-elections, and more synchronous global growth within a low inflation regime. "Additionally, improved global liquidity conditions, as central banks in the West ease their monetary policy stance, will enhance capital flows and drive higher investments, particularly in the private sector," Majumdar said. Observing that strong economic fundamentals would drive <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> between 7 per cent and 7.2 per cent in FY25, the Economic Outlook report said effectively addressing the urban-rural consumer spending gaps, inflation, and employment concerns can significantly enhance the affordability of aspirational rural consumers. "The much-desirable policy pivot was evident in the Union Budget presented last month. Reducing the urban and rural spending gap in the coming years will ensure sustained consumer demand from a larger consumer base," it added. Deloitte India's growth projection is at par with that of RBI, which projected FY'25 growth at 7.2 per cent. It is higher than Finance Ministry's Economic Survey which estimated GDP expansion between 6.5-7 per cent. The <keyword id="19948184" type="General" weightage="20" keywordseo="Indian-economy" source="keywords">Indian economy</keyword> grew at 8.2 per cent in 2023-24 fiscal year. The report further said despite strong growth, private consumption spending has remained modest over the past five years. The pandemic, high global and domestic inflation, consequent tightening of financial conditions, and the effects of poor agriculture output on rural demand seem to have capped private consumption growth in India. But a Deloitte research showed that India is witnessing distinct and broad-based shifts in consumption patterns. There is a broad-based shift in the composition of consumption towards more non-food and discretionary items, reflecting changing lifestyles and preferences that are here to stay. According to the Household Consumption Expenditure Survey, spending on discretionary goods and services (including conveyance) has gone up both in rural and urban India, with the former quickly catching up in spending on discretionary durable goods (including automobiles, electric and electronic goods) with the latter in just one decade. "Demand for processed food has been among the highest in most states, suggesting a shift towards ready-to-eat options. Rapid urbanization, increasing women's participation in the workforce, and enhanced marketing and availability are driving these changing dietary habits," the report said. According to Deloitte research, if increasing income in states results in a relatively equitable distribution and higher rural spending, businesses can tap into a larger proportion of the state's population that resides in rural areas. This gives businesses access to a large consumer base and a sustainable consumer spending demand, as compared to states with a widening gap.

Indian economy likely to grow at 7-7.2 percent in FY25,Deloitte India says

<ul><li>The US economy is still firing on all cylinders despite slowing GDP growth in the first quarter.</li><li>Carson Group strategist Sonu Varghese highlighted five economic indicators that show the strength.</li><li>"The workhorse of the US economy remains the consumer, and there's really not much sign of a slowdown," Varghese said.</li></ul>The US economy is firing on all cylinders despite <a href="https://www.businessinsider.com/gdp-gross-domestic-product-first-quarter-economy-growth-2024-4">a slowdown in first-quarter GDP growth,</a> according to Carson Group global macro strategist Sonu Varghese.Varghese highlighted five economic indicators that show continued underlying strength in the US economy, giving him little reason for concern as the labor market continues to power higher."The workhorse of the US economy remains the consumer, and there's really not much sign of a slowdown as far as household spending is concerned," Varghese said in a note last week. "In fact, services spending, which makes up 45% of the economy rose at an annualized pace of 4%."That 4% growth rate is more than double the 1.8% growth trend seen from 2010 through 2019, according to Varghese, and it represents the fastest pace of growth since the third-quarter of 2021. "The current strength of consumption is directly related to the strength of American household finances," Varghese said.These are the five indicators that give Varghese confidence that the US consumer, and therefore the US economy, remains on solid footing.<h3>1. Income growth is outpacing inflation</h3>Despite elevated inflation, wage growth continues to outpace inflation growth, and that's ultimately a boon for consumers.Disposable incomes grew at an annualized pace of 4.8% in the first-quarter, and employee compensation soared 7.8%. Meanwhile, PCE inflation rose 4.4%."That's the simplest explanation for why consumption continues to run strong," Varghese said.<div type="image" title="Income versus inflation" height="803" width="626" msid="109792200" hostid="261" sizebytes="20070"></div><h3>2. Average hourly earnings are also outpacing inflation</h3>It's not only high-income earners that are seeing their wages outpace inflation. The average every-day worker is also seeing their income grow faster than the pace of inflation."Inflation-adjusted hourly wages are growing even when you look at the average worker, and separate non-managers from managers," Varghese explained.That's important because non-managers tend to spend a greater portion of their incomes from wages, so it's important that they see their wage growth outpace inflation. <div type="image" title="hourly earnings growth outpaces inflation" height="752" width="647" msid="109792202" hostid="261" sizebytes="27276"></div><h3>3. Consumer balance sheets are strong</h3>A continued rise in the stock market and housing prices means Americans are more wealthy today than they have ever been.US consumers held a collective $176.7 trillion in assets as of December 31, and their liabilities have not risen as quickly as their assets have.That means consumers have ample room to spend money and save less, which makes it no surprise that the savings rate of US consumers has steadily declined over the past few years to 4.2% today from 7.4% in 2019."This is not surprising considering net worth is higher. Why save more if you're worth more?" Varghese said. <div type="image" title="Consumer balance sheet" height="696" width="653" msid="109792204" hostid="261" sizebytes="27840"></div><h3>4. Consumer's have capacity to borrow more</h3>Across all levels of the income spectrum, consumers owe less in debt relative to their income than they have in decades.The household debt service ratio, which measures debt payments as a percentage of disposable income, stood at 9.8% in the fourth-quarter of 2024. That's significantly below the 13.3% peak hit in 2007 and the historical average of 11.2%, and it suggests that consumers have ample flexibility to borrow more money and consumer if they have to. "Across all income groups, liabilities as a percent of assets are well below what we've seen historically. In short, households are significantly less levered than in the past," Varghese said.<div type="image" title="Debt service ratio" height="837" width="648" msid="109792206" hostid="261" sizebytes="28142"></div><h3>5. The jobs market is still resilient</h3>"The labor market is the entire ballgame as far as the consumer is concerned. If the labor market deteriorates, incomes fall, consumption falls, and the economy is in trouble," Varghese said.And so far, there are no signs of that happening. "We have the opposite now," Varghese highlighted.The unemployment rate has stayed below 4% for 26 consecutive months, representing the longest streak since the late 1960s. Meanwhile, there is still more than one job opening for every unemployed worker, and weekly jobless claims continue to hover near historically low levels. "Ultimately, here's what's important to keep in mind: consumption makes up 70% of the US economy, and right now consumption is running strong thanks to strong labor markets, which are pushing incomes higher to above the pace of inflation, and higher net worth, which means households can spend more," Varghese concluded.

5 indicators that show the US economy is still firing on all cylinders despite slowing GDP

<ul class="summary-list"><li>Russia can avoid crisis for three to five years, the Center for Analysis and Strategies in Europe said.</li><li>Domestic demand has kept the country strong, becoming a key driver of growth, the think tank said.</li></ul>Russia's wartime economy could be in it for the long-haul — or at least longer than expected.A team of economists is unconvinced that Russia will tumble into economic collapse any time soon, as suggested by some analysts.Instead, Russia's economic capability "excludes almost any chance of a serious crisis cause by internal factors in at least three-to-five years perspective," three authors wrote in a <a target="_blank" href="https://case-center.org/wp-content/uploads/2024/11/case-241112-en_fin2_compressed.pdf">report</a> for the Center for Analysis and Strategies in Europe.The paper counters notions that a Russian crisis will come as soon as next year, an argument made by economists such as Yuriy Gorodnichenko. The UC Berkley analyst told Business Insider that Moscow's slowing energy trade and dollar shortage would <a target="_blank" href="https://www.businessinsider.com/russia-economy-collapse-recession-moscow-ukraine-war-us-dollar-energy-2024-7">cause the crisis</a>.Even observers within the country expect<a target="_blank" href="https://www.businessinsider.com/russia-economic-experts-forecast-bumpy-2025-for-country-inflation-putin-2024-11"> struggle in 2025</a>, including <a target="_blank" href="https://www.businessinsider.com/russia-economy-outlook-stagflation-recession-inflation-gdp-growth-ukraine-war-2024-11">the specter of staglfation</a>.But though Moscow is guaranteed to face challenges at some point, the CASE authors cautioned not to translate hardships into proof of a near-term crisis.Instead, these three trends will keep Russia resilient, they said:<h3 id="e2e33bea-404e-4393-9ba3-00371b80bb8d">1. Don't underestimate domestic demand</h3>According to the report, Russia's domestic market has been an underrated factor behind the country's perseverance.After Moscow's invasion of Ukraine, local consumption has kept the economy afloat, with domestic demand overtaking exports as a leading growth driver."In the construction sector alone in 2023, up to 30 million tons of steel were consumed (the increase from the previous year amounted to 9 percent), while before the war, in 2021, just over 15 million tons were exported," CASE said.Moscow's war efforts boosted the purchasing power of millions, as the need for soldiers lifted wages across the country. With more manpower needed at the front-lined, a rising <a target="_blank" href="https://www.businessinsider.com/russia-economy-growth-recession-labor-worker-shortage-inflation-sanctions-west-2024-9">labor shortage</a> at home furthered the wage trend.Lower-income Russians benefited the most, as recruited soldiers have largely stemmed from economically-depressed regions. In turn, these households spent heavily on domestically-products essentials.Meanwhile, wealthier households have benefited from Russia's high interest rates, which have boosted investment incomes, the report said."As a result, in 2022–2024, federal budget revenues from domestic sources were growing faster than oil and gas proceeds, whose share has declined from 40–45 percent of overall revenues in 2014–2019 to 30–35 percent in 2023–2024," it said.Demand is also not going away if the war does end soon, the CASE analysts said. On one hand, it shouldn't be assumed that defense spending will ease once peace returns, given that the Kremlin has indicated plans to keep defense industry production running at elevated levels.Secondly, returning soldiers will require care, and the subsidy programs that crop up should keep aggregate demand afloat.<h3 id="7977f137-74bc-4736-a4f9-c8bbde4a0eaa">2. Sustainable war spending</h3>Some have forecast an <a target="_blank" href="https://www.businessinsider.com/russia-economy-ukraine-war-moscow-military-spending-currency-inflation-budget-2024-9">immediate recession</a> if Russia's war in Ukraine ever ends, arguing that the Kremlin's massive war budget is responsible for the economy's continued survival.But Moscow's swelling war expenditures aren't unsustainable, CASE said.Though defense and national security spending will now account for <a target="_blank" href="https://www.businessinsider.com/russia-economy-outlook-defense-budget-spending-ukraine-war-putin-sanctions-2024-10">40% of all federal expenditures</a>, the report noted that the Kremlin has financing options.For instance, Moscow has a "huge space" in domestic borrowing, given that Russia's government's 18.1% debt-to-GDP isn't significant by modern standards.At the same time, the government has steadily increased tax burdens on both individuals and corporations. Next year, a long-standing flat income tax rate is set to be replaced by a progressive tax scale.Nominal business tax rates face an annual increase, equal to about 1 percentage point of GDP between 2023 and 2025.<h3 id="51c2f739-8912-4254-ba4d-5b049839921d">3. Inflation and labor concerns are non-issues</h3>CASE acknowledged that more spending and higher wages have created an fueled inflation, but said it shouldn't pose a severe threat.As price growth <a target="_blank" href="https://tass.com/economy/1871947">reached 8.54% in October,</a> that's good news for Moscow, as single-digit inflation won't trigger a slowdown. Instead, it will most likely be treated as a "new normal."Russia can also expect labor relief over time. Though the country was estimated to be missing as many as <a target="_blank" href="https://www.businessinsider.com/russia-lacks-workers-ukraine-war-labor-crisis-worker-shortage-2023-12">five million workers in 2023</a>, cutting down on excess employment among corporations could free up 2 million workers, CASE estimated.The report also cited discussions to cut down on easy access to higher education, and potentially make technical colleges a requirement. Changes to migration policy that would bring in more labor are also being pursued.

3 reasons why Russia's economy can survive without crisis for up to 5 more years, think-tank economists say

New Delhi, Global rating agency Moody's has raised India's growth forecast to 6.7 per cent from 5.5 per cent for 2023. At the same time though, it has lowered the <keyword id="35050" type="General" weightage="20" keywordseo="GDP" source="Orion">GDP</keyword> forecast for 2024 from 6.5 per cent to 6.1 per cent. "Since the second quarter out performance creates a high base in 2023, we have lowered our 2024 growth forecast from 6.5 percent to 6.1 per cent. Given the robust underlying economic momentum, we also recognise further upside risk to India's economic growth performance," it said on Friday. Moody's 6.7 per cent growth forecast for 2023 is slightly higher than RBI's projection of 6.5 per cent for 2023-24. India has recorded a growth of 7.8 per cent in the first quarter of the current fiscal, which was lower than RBI's projection of 8 per cent for the April-June period of 2023-24.

Moody's raises India's GDP forecast to 6.7% for 2023

<ul><li>The GDP growth rate for the first quarter of the 2019-20 came lower than expectations, at a mere 5%.</li><li>However, online searches for ‘<keyword id="121430" type="PERSON" weightage="20" keywordseo="recession-in-india">recession in India</keyword>’ had spiked many times over in the last couple of months.</li><li>Afraid of a severe slowdown, Indian consumers had cut back expenses, even on items of daily use, setting in motion a vicious cycle of slowdown in manufacturing, investments, and unemployment.</li><li>Economists hope the recent stimulus from both the government and the RBI, as well as good rains, will help in reviving both the economy and the sentiment.</li></ul> India’s growth in gross domestic product (GDP) between April and June 2019 was a mere 5%, the worst in over six years and way below estimates. The data was released on Friday (August 30) but people in India had already been fearing a recession much before the government admitted to a sharp slowdown. Google Trends show that online searches for ‘recession in India’ spiked in the last couple of months, many times over, showing that people had already started to feel the pinch. 
	
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 The very first day of trading after the Finance Minister Nirmala Sitharaman announced the mega merger of ten public sector banks (PSB) into four, the stock markets went tumbling down on Tuesday September 3. Sensex shed 600 points whereas Nifty lost over 180 points. This fall was led by PSB stocks and most of their stocks were down by over 5%. This is one of the many measures taken to revive the economy. The economic wheel was brought to a grinding halt by demonetisation in November 2016, and the recovery was delayed by the disruptions caused by the introduction of Goods and Services Tax (GST) in mid-2017. As tax revenue fell, the Narendra Modi government <a href="https://www.indiatoday.in/business/story/bonds-indian-economy-government-spending-1580704-2019-08-14">reduced spending</a> to keep the fiscal deficit under check. Private investments had already <a href="https://www.thehindu.com/business/performance-of-corporate-firms-declines/article29231755.ece">gone into a shell</a>, and as the Modi government tightened its purse strings in the last year of its first term, economic activity spiraled down. 
 
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 The report authored by Soumya Kanti Ghosh is pushing for more aggressive interest rate cuts by the RBI. “We believe it is incorrect for central bankers to suggest that they have this challenge under control - or that with their current toolkit they will be able to get it under control,” said SBI Ecowrap. This deep slowdown is a culmination of many areas, in addition to decline in consumer sentiment right from slowing auto sales to reduced air traffic growth to cut backs on items of daily use. Before taking a look ahead, let’s look at the three main areas where growth is slowing down. Consumption hits a standstill with job losses Weary Indians are cutting down on expenses like no other, and that has affected the economy. As many as 350,000 jobs were cut in the formal sector of automobiles. This massive number does not count in <a href="https://www.businessinsider.in/a-third-of-indias-textile-workers-30-million-lost-their-jobs-and-more-could-go/articleshow/70781257.cms">textiles, diamond workers and </a>others. Combined with the informal sector job loss, the consumption loss would translate to around ₹15,000 crore. The growth in consumption expenditure slumped to 3.1% in the three months ending June 2019-- the weakest in five years. More than half of India lives outside the cities, and the broad-based consumption slowdown reflects the deep distress in the rural parts. “Agriculture, forestry and fishing output grew by 2% improving slightly from de-growth (contraction) of 0.1%,” said a report by Edelweiss. Manufacturing shutters down With low consumption and almost no demand growth in sight, the quarter’s manufacturing growth was as low as 0.6%. This is in spite of high growth in electricity and utility expansion. Investment lowers with less to spend Indian companies are seeing less reasons to keep their plants running, there is much less to invest either. As a result, investments growth has slipped to just 3.7%. Companies are choosing to park their money in financial assets rather than betting on a slowing economy. “With low wage growth rate, household savings are also particularly down. Thus, households are not closing the savings-investments gap and this is bringing down overall investments,” said Edelweiss. Simply put, people are choosing to hold on to cash rather than invest anywhere <a href="https://www.businessinsider.in/gold-prices-on-a-rally-set-to-test-new-highs-of-1450-per-ounce/articleshow/69970217.cms">other than gold</a>. Will the Indian economy weaken further or enter a recession? An economy is defined to be in a recession if growth contracts for two straight quarters. That isn’t the case with India. However, many sectors within the Indian industry like automobiles and textiles-- two of the largest providers of jobs-- are already in recession. So there are reasons to worry but may be not for panic. The chickens have come home to roost. But the government has woken up to the emergency and is <a href="https://www.businessinsider.in/nirmala-sitharam-address-on-india-economic-stimulus-live-updates-and-highlights/articleshow/70804926.cms">shoring up money</a> to battle the slowdown. “Based on fiscal deficit numbers, in Pradhan Mantri Kisan Yojana (PMKY), the government will save ₹30,000 crore. If we add <a href="https://www.businessinsider.in/sensex-today-jumps-150-points-after-rbi-move-to-transfer-surplus/articleshow/70852202.cms">RBI surplus transfer</a>, the Government further would have adequate cushion for make up for revenue loss,” said a report by SBI Ecowrap. The more money the government spends in stimulating demand and investments in the economy either through sops for consumers or incentives for industries, the sooner the economy will revive. Aside from giving the government a part of its reserves, the RBI has already cut interest rates four times this year hoping to bring down lending rates, and Edelweiss believes that India’s GDP growth will start improving hereon as the effect of RBI’s measures start to trickle in. The rains will also have a role to play. “This number is likely to improve further the next quarter as a South-west monsoon season has been normal for this year,” the Edelweiss report said. Just like the pain of demonetisation and GST have lingered on for over two years, the government’s recent measures to boost economic growth may show effect with a lag.

Indians were fearing recession even before data showed that GDP growth hit a six-year low

The global gross domestic product (<keyword id="35050" type="CITY" weightage="20" keywordseo="gdp">GDP</keyword>) will grow at 5.6 per cent this year if <keyword id="10901023" type="UNKNOWN" weightage="20" keywordseo="covid-19-vaccination-rollouts">Covid-19 vaccination rollouts</keyword> are fast and effective enough across the <keyword id="6354507" type="UNKNOWN" weightage="20" keywordseo="World">world</keyword>, the Paris-based Organization for Economic Cooperation and Development (OECD) said. World output is expected to reach pre-pandemic levels by mid-2021 and the global economy is expected to grow by 4 per cent in 2022 after seeing 5.6 per cent growth in 2021, the OECD said in its latest Interim Economic Outlook issued on Tuesday. The OECD projected the US economy to grow at 6.5 per cent in 2021 thanks to "<keyword id="10901022" type="UNKNOWN" weightage="20" keywordseo="significant-fiscal-stimulus">significant fiscal stimulus</keyword> along with faster vaccination", reporters said. It forecast that GDP will rise 3.9 per cent in the euro area, "where the level of fiscal stimulus is lower and vaccine rollout slower". Prospects are brighter in the Asia-Pacific region where several countries have effectively contained the virus and industrial activity has regained dynamism, the OECD said. "In China, the GDP growth is projected to be 7.8 per cent this year; in Japan 2.7 percent; in Korea 3.3 per cent; and in Australia 4.5 per cent. "The recovery is likely to be more moderate in the emerging market economies of Latin America and Africa amid a resurgence of the virus, slow vaccine deployment and limited scope for additional policy support," it added. "Speed is of the essence," said OECD Secretary-General Angel Gurria. "Vaccines must be deployed faster and globally. This will require better international co-operation and co-ordination than we have seen up to now." OECD Chief Economist Laurence Boone said vaccination programs and stimulus measures should work hand in hand. "Widespread vaccination of the adult population is the best economic policy available today to get our economies and employment growing again," she said. "If we don't get enough people vaccinated quickly enough to allow restrictions to be lifted, the recovery will be slower and we will undermine the benefits of fiscal stimulus." SEE ALSO: <a href="https://www.businessinsider.in/tech/news/checkout-review-of-oppo-fitness-band-related-to-design-performance-price-and-battery-life/articleshow/81423414.cms">Oppo Band Style review – getting the basics right with a twist of flair</a> <a href="https://www.businessinsider.in/international/news/narendra-modi-joe-biden-yoshihide-suga-and-scott-morrison-are-set-to-meet-for-the-first-ever-quad-leaders-summit-on-march-12/articleshow/81424117.cms">The first-ever leaders summit of the QUAD may be another signal that it's ready for something more formal</a> <a href="https://www.businessinsider.in/stock-market/news/how-to-check-share-allotment-status-of-mtar-technologies-ipo/articleshow/81424102.cms">MTAR Technologies IPO: Here is how to check share allotment status</a> <a href="https://www.businessinsider.in/tech/enterprise/news/tcs-cfo-explains-how-the-role-of-a-finance-head-has-been-changed-by-the-pandemic/articleshow/81423884.cms">EXCLUSIVE: TCS CFO explains how the role of a finance head has been changed by the pandemic</a>

World GDP to grow 5.6% if COVID-19 vaccine rollout fast and effective across the world, says OECD

<ul class="summary-list"><li>The <keyword id="6355408" type="DEFINITION" weightage="60" keywordseo="imf">IMF</keyword> raised its forecast for US growth to 7% for 2021, from the previously predicted 4.6%</li><li>The fund believes the <keyword id="6355253" type="UNKNOWN" weightage="60" keywordseo="federal-reserve">Federal Reserve</keyword> will need to hike interest rates in late 2022, or early 2023.</li><li>Last month, the <keyword id="45672" type="ORGANIZATION" weightage="60" keywordseo="Fed">Fed</keyword> said it expected to raise rates in 2023, but individual policymakers expect earlier hikes. </li></ul>The <keyword id="6366068" type="ORGANIZATION" weightage="60" keywordseo="international-monetary-fund">International Monetary Fund</keyword> has lifted its outlook for US economic growth to 7% for this year, and believes the Federal Reserve will raise interest rates by the end of 2022, as recovery takes root. The IMF had previously anticipated an annual growth rate of 4.6% for this year. Should the US economy indeed by 7% in 2021 - as both the Fed and now the IMF expect - this would be the fastest expansion since 1984. Kristalina Georgieva, the IMF managing director, said the improved outlook was based on the American Jobs and Families plans being implemented in line with the outlines presented by the Biden administration, as they appear likely to improve living and income standards in the long term. "We believe that these two packages will add to near-term demand, raising GDP by a cumulative 5¼ percent over 2022-24. And-perhaps more importantly-our assessment is that GDP will be 1 percent higher even after 10 years, thanks to the significant, positive effects on labor force participation and productivity introduced by these two plans." she <a href="https://www.imf.org/en/News/Articles/2021/07/01/sp070121-md-opening-remarks-us-article-iv">said</a> in a report released on Thursday. Biden's infrastructure plan was also referenced in the IMF's assessment. The bipartisan program allocates $1.2 trillion over the next five years to improving things such as roads, broadband access and education. The IMF also said it expected US interest rates to rise more quickly than the Fed currently anticipates."Presuming staff's baseline outlook and fiscal policy assumptions are realized, policy rates would likely need to start rising in late-2022 or early-2023," the IMF said.At its mid-June meeting, the Fed said it expected to raise interest rates by 2023. Several individual policymakers have however since said they expect monetary policy to tighten sooner than this.The Fed's more hawkish outlook initially fueled some concern among investors, particularly relating to the implications for the central bank's highly accommodative monetary policy stance. Stocks wavered for a few weeks, but have since recovered and hit successive record highs in the last week. Government bond yields have fallen to around six-month lows, highlighting that investors trust the Fed's ability to target inflation without derailing the economy.Both the IMF and the Fed expect inflation to be transitory and short-term, rather than weigh on <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> for a prolonged period of time.

IMF lifts US growth outlook for this year to 7%, says Fed may need to hike rates earlier than it expects

Mumbai, May 20 () Domestic rating agency Icra on Wednesday warned of a deep recession as it drastically lowered FY21 growth forecast for India to minus 5 per cent, citing the very modest fiscal support, extension of the nationwide lockdown and looming labour shortage. The agency also sharply revised downwards the growth contraction in Q1 to 25 per cent as against the previous forecast of 16-20 per cent and to minus 2.1 per cent in Q2 from 2.1 per cent growth previously, which implies a recession. Though the government has been claiming that its economic stimulus package is worth 10 per cent of GDP or Rs 20.9 lakh crore, analysts have pegged it at just 0.8 - 1.2 per cent of the GDP. After the two phases of the nationwide lockdown, many experts warned of a minor contraction in growth. But with the lockdown being extended to end-May, and expectation of substantial delays in getting the supply chains operational following the return of millions of migrant workers to their home states, Q1 degrowth will be deeper, and recovery will be shallower and more delayed than our earlier assessment, Icra said. "Accordingly, we now expect FY21 growth to contract by a whopping 5 percent relative to our earlier expectation of 1-2 percent," its Chief Economist Aditi Nayar and Economist Aarzoo Pahwa said in a note. Icra sees Q1 GDP contracting by 25 per cent as against previous forecast of 16-20 per cent and Q2 growth contracting by 2.1 percent from a 2.1 per cent growth expected previously. However, the economy may see a moderate 2.1 per cent growth in Q3 (against previous estimate of 3.6 per cent growth) and 5 per cent in Q4. The much-touted Rs 20.97 lakh crore package includes Rs 8.02 lakh crore monetary measures announced by the Reserve Bank since February as well as the Rs 1.93 lakh crore initially announced by the Centre and revenue foregone due to tax concessions. According to Icra, these announcements are only enabling provisions to support a recovery after the lockdown by helping the most stressed sectors get working capital credit. None of these offer to absorb their losses from the lost output for more than two months, it said. Moreover, the reforms announced will have any meaningful outcomes only with a lag of a few years. "Overall, we estimate the direct fiscal cost of this package to be limited to 1 percent of GDP, or around 10 percent of the total announcements," they said, adding these measure will not be able to counter the demand destruction caused by the pandemic, or address the prevailing supply chain infirmities. While the agency had earlier forecast a V-shaped recovery, it warned that if there is a second wave of infections and subsequent lockdowns either in India or globally, the ensuing demand uncertainty and supply chain hiccups may result in a W-shaped economic cycle. On the labour issue, it said multiple extensions of the lockdown has created uncertainty and untold misery to the poor migrant workers forcing them to flee to their villages. "With a considerable portion of their savings likely to have been used up over the last two months, we feel that they may choose to delay their return to the cities until after the festive season is over, which could affect the pace of normalisation in various economic activities, including manufacturing and construction," it added. BEN ABM ABM

Icra warns of deep recession, GDP to contract 5 pc in FY21

<ul class="summary-list"><li>A national <keyword id="6438835" type="UNKNOWN" weightage="60" keywordseo="mask">mask</keyword> mandate could potentially substitute for lockdowns to curb the spread of <keyword id="1754604" type="PERSON" weightage="60" keywordseo="coronavirus">coronavirus</keyword>, <keyword id="6361649" type="UNKNOWN" weightage="60" keywordseo="Goldman-Sachs">Goldman Sachs</keyword> Chief Economist Jan Hatzius wrote in a Monday note. </li><li>Goldman's baseline estimate is that a national mandate could raise the percentage of people who wear masks by 15 percentage points and cut the daily growth rate of confirmed cases by 1 percentage point to 0.6%. </li><li>That could save the US from a 5% hit to <keyword id="6354971" type="DEFINITION" weightage="60" keywordseo="gross-domestic-product">gross domestic product</keyword> that could result from renewed lockdowns, according to Goldman Sachs. </li></ul>A national mask mandate could potentially slash coronavirus infections in the US and save the country from a 5% hit to its gross domestic product, according to Goldman Sachs. In a Monday note, chief economist Jan Hatzius and his team investigated the link between wearing a mask and certain economic and health outcomes of COVID-19. "We find that face masks are associated with significantly better coronavirus outcomes," Hatzius wrote. Face mask use lowered infection growth rates and death rates, the team found. The causal relationship was not weakened when controlling for avoiding large gatherings or avoiding public interactions.A national mandate would also "likely increase face mask usage meaningfully," Goldman said. Goldman's baseline estimate is that a national mandate could increase the percentage of people who wear masks by 15 percentage points, and cut the daily growth rate of confirmed cases by 1 percentage point to 0.6%. Read more: <a href="https://www.businessinsider.com/stock-market-picks-to-buy-investing-strategy-high-volatility-goldman-2020-6">Goldman Sachs has formulated a strategy that could triple the market's return within a year as volatility remains higher than normal — including 11 new stock picks for the months ahead</a>"These calculations imply that a face mask mandate could potentially substitute for lockdowns that would otherwise subtract nearly 5% from GDP," said Hatzius. The US currently does not mandate mask wearing — instead, it issued a <a href="https://www.whitehouse.gov/briefings-statements/remarks-president-trump-vice-president-pence-members-coronavirus-task-force-press-briefing-18/">national recommendation in April</a>. While some <a href="https://www.businessinsider.com/coronavirus-the-17-states-requiring-people-to-wear-masks-public-2020-6">states adopted stricter measures</a>, some such as Texas and Florida opposed a state-wide mask mandate. By analyzing state-level mask usage, Goldman found that mandates gradually raise the percentage of people who "always" or "frequently" wear masks by 25 percentage points in the 30 days after signing.In addition, the percent of people who say they "always" wear a mask jumped by nearly 40 percentage points more than 30 days after signing, "reflecting some people switching from 'frequently' and other categories to 'always'," according to the note. Read more: <a href="https://www.businessinsider.com/stock-picks-to-buy-how-to-invest-home-improvement-boom-2020-6">BANK OF AMERICA: Buy these 8 retail stocks as they rake in revenues from an unprecedented surge in home-improvement spending</a>The US <a href="https://markets.businessinsider.com/news/stocks/us-recession-economy-february-coronavirus-nber-official-data-2020-6-1029289987?utm_campaign=browser_notification&amp;utm_source=desktopktop">fell into a recession in February</a> due to the impact of coronavirus, which has had a huge negative impact on gross domestic product. <a href="https://www.businessinsider.com/us-gdp-falls-first-quarter-impact-coronavirus-economy-recession-economy-2020-4">US GDP fell nearly 5% in the first quarter</a> of 2020, and is estimated to slump more than 30% in the second quarter due to the pandemic. To determine how a mask mandate would impact <keyword id="293989" type="ORGANIZATION" weightage="60" keywordseo="US-GDP">US GDP</keyword>, Goldman considered how severe government lockdowns would have to be to have the same outcome — lowering infections by 1 percentage point. They found that their effective lockdown index would have to increase 16 percentage points to lower infections 1 point. This jump might reduce US GDP by nearly 5%, according to the note. And, even taking into account any uncertainty in Goldman's analysis, it "suggests that the economic benefit from a face mask mandate and increased face mask usage could be sizable," he said. Read more: <a href="https://www.businessinsider.com/real-estate-investing-strategy-for-apartment-buildings-syndication-joe-fairless-2020-6" target="_blank" rel="noopener">Real-estate investor Joe Fairless breaks down how he went from 4 single-family rentals to overseeing 7,000 units worth $900 million — and outlines the epiphany that turbocharged his career</a>

Goldman Sachs says national mask mandate could save US from a 5% hit to GDP

<ul class="summary-list"><li>Global <keyword id="6354298" type="DEFINITION" weightage="60" keywordseo="Stocks">stocks</keyword> stood near record highs on Friday after strong US and <keyword id="1334" type="COUNTRY" weightage="60" keywordseo="China">China</keyword> economic data.</li><li>UBS predicts the S&amp;P 500 could end the year 5% higher at 4,400.</li><li>Germany's health chief said citizens need to drastically reduce contact to curb the third wave.</li></ul>Global stocks were trading near record highs on Friday after <keyword id="404589" type="PERSON" weightage="60" keywordseo="US-jobless-claims">US jobless claims</keyword> <a href="https://www.businessinsider.com/weekly-jobless-claims-576000-unemployment-benefits-economic-recovery-job-growth-2021-4">tumbled to a pandemic-era low</a> and <a href="http://www.stats.gov.cn/english/PressRelease/202104/t20210416_1816315.html">China said its economy grew 18%</a> in the first-quarter of 2021.The MSCI Index's broadest gauge of global stocks edged up 0.05% in early European trade, just slightly lower than Thursday's record peak.Futures on the <a href="https://markets.businessinsider.com/index/dow_jones">Dow Jones</a>, <a href="https://markets.businessinsider.com/index/s&amp;p_500_500">S&amp;P 500</a>, and <a href="https://markets.businessinsider.com/index/nasdaq_100">Nasdaq</a> whipsawed between gains and losses, suggesting a mixed open when US indices start trading later in the day.US jobless claims for the week through April 10 fell to 576,000, <a href="https://www.businessinsider.com/weekly-jobless-claims-576000-unemployment-benefits-economic-recovery-job-growth-2021-4">beating economist expectations</a> of 700,000. That is the lowest unemployment figure since claims soared at the start of the pandemic.Outperformance of technology stocks led the Nasdaq to gain 1.31% on Thursday, taking it to within half a percent of its record close. Yield on the 10-year Treasury fell 11 basis points on Thursday, before bouncing back to 1.58%.Key figures released by Chain's statistics bureau pointed to a continued rebound, but they are perhaps unusually strong in comparison with last year, when the economy contracted in response to the pandemic.UBS said while investing at all-time highs may be daunting for some, it expects more upside ahead and predicts the S&amp;P 500 could end the year at 4,400, roughly 5% higher than where it is right now."As the economic reopening accelerates in the coming months, we believe the bull market remains on a solid footing," said Mark Haefele, chief investment officer at UBS Global Wealth Management. "We maintain a cyclical bias and prefer US consumer discretionary, energy, financials and industrials. We also retain our preference for value versus growth, as well as for small- and mid-caps over large-caps."Elsewhere in Europe, the head of Germany's disease control agency said people need to <a href="https://www.theguardian.com/world/2021/apr/15/germany-third-covid-wave-needs-drastic-measures-says-health-chief">drastically reduce contact</a> to curb a third wave of coronavirus infections. Cases in the country were up by 31,117 on Thursday - the most since mid-January.London-based research company Airfinity announced <a href="https://twitter.com/Airfinity/status/1382004108635344897">1 billion doses</a> of COVID-19 vaccines have been made so far. It forecasts the world could produce another billion doses in the next month alone as production ramps up.London's <a href="https://markets.businessinsider.com/index/ftse_100">FTSE 100</a> rose 0.4%, the <a href="https://markets.businessinsider.com/index/euro_stoxx_50">Euro Stoxx 50</a> rose 0.3%, and Frankfurt's <a href="https://markets.businessinsider.com/index/dax">DAX</a> ignored the health crisis in Germany and rose 0.5%.Asian <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> traded higher on the back of strong Chinese data."With the recovery happening as expected, the market anticipates that monetary policy will be normalized, and liquid margins tightened," said Lynda Zhou, a portfolio manager at Fidelity International. "Overall, market sentiment remains fragile as it tends to react slowly to positive news and quickly to negative news."China's <a href="https://markets.businessinsider.com/index/shanghai_composite">Shanghai Composite</a> rose 0.8%, Japan's <a href="https://markets.businessinsider.com/index/nikkei_225">Nikkei</a> rose 0.2%, and Hong Kong's <a href="https://markets.businessinsider.com/index/hang_seng">Hang Seng</a> rose 0.8%

Global stocks near record highs after economic data from the US and China highlights robust recovery

<ul class="summary-list"><li>Sen. <keyword id="174956" type="PERSON" weightage="60" keywordseo="Sherrod-Brown">Sherrod Brown</keyword>, an Ohio Democrat, grilled Treasury Secretary Steven Mnuchin and Federal Reserve Chairman <keyword id="1727754" type="PERSON" weightage="60" keywordseo="Jerome-Powell">Jerome Powell</keyword> over the administration's <keyword id="1754604" type="PERSON" weightage="60" keywordseo="coronavirus">coronavirus</keyword> economic relief efforts during a Tuesday Senate hearing. </li><li>"How many workers should give their lives to increase our GDP by half a percent?" Brown, the top Democrat on the committee, asked Mnuchin, referring to US gross domestic product.</li><li>Brown and other Democrats want the federal government to implement hazard pay, which would boost wages for essential workers.</li></ul>Sen. Sherrod Brown, an Ohio Democrat, grilled Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell over President Donald Trump's coronavirus economic relief efforts, urging the administration to boost pay for low-wage essential workers. While Trump and his aides are hitting the brakes on federal fiscal spending as unemployment surges, Powell is pushing the administration to spend more to help laid-off workers and businesses on the verge of bankruptcy. Brown and other Democrats want the federal government to implement hazard pay, which would boost wages for essential workers, who are risking their lives as they work through the <keyword id="43587" type="ORGANIZATION" weightage="60" keywordseo="pandemic">pandemic</keyword>. Many essential workers make less than laid-off Americans who collect unemployment insurance. "A grocery store worker in Ohio told me recently, 'I don't feel safe at work and they don't pay me much. I don't feel essential, I feel expendable,'" Brown said during <a href="https://www.c-span.org/video/?472163-1/fed-reserve-chair-powell-treasury-secretary-mnuchin-testify-cares-act-coronavirus-relief-bill&amp;live&amp;vod&amp;vod">a virtual Tuesday hearing</a> before the Senate Banking Committee. He added later, "Thanking is great, but is it fair that our economy pays the essential workers so little in such dangerous conditions?" At one point during Brown's questioning, he asked Mnuchin to estimate how many American workers would die from the corona<keyword id="10860" type="ENTERTAINMENT" weightage="60" keywordseo="Virus">virus</keyword> if they're forced to return to work without proper measures in place to contain the virus' spread. "How many workers should give their lives to increase our GDP by half a percent?" Brown, the top Democrat on the committee, asked Mnuchin, referring to US gross domestic product.Mnuchin replied, "No workers should give their lives to do that, Mr. Senator, and I think your characterization is unfair." Mnuchin received bipartisan criticism on Tuesday from lawmakers who said the almost $3 trillion in aid Congress has passed isn't getting to businesses as quickly as it should. Trump has long pushed for the economy to reopen quickly, even as health experts urge states to follow federal guidelines to ensure new virus outbreaks don't grow out of control. Brown also slammed Senate Majority Leader Mitch McConnell over his "reckless decision" to reconvene the Senate even as health experts warn the chamber doesn't have the necessary measures in place to keep senators, their staff, and all Senate employees safe from the virus. Read the original article on <a href="https://www.businessinsider.com/sherrod-brown-slams-treasury-secretary-steve-mnuchins-economic-relief-2020-5">Business Insider</a>

Democrat Sherrod Brown slams Trump's economic relief efforts and asks how many American lives are worth .5% of GDP

Mumbai, May 26 () Led by a massive spike in revenue deficit of 2.8 per cent of GDP, the aggregate fiscal deficit of the states will rise to 4.5 per cent of the GDP in 2020-21 at Rs 8.5 lakh crore as against the earlier forecast of 3 per cent of GDP, says a report. As the nine-week long national lockdown to contain the spread of the coronavirus pandemic crippled the economy, the Centre has allowed the states to borrow 200 bps more than the legally mandated 3 per cent deficit while the Centre itself has upped its borrowing targets by Rs 4.2 lakh crore. But most states are not eligible to draw down the full 5 per cent as the incremental borrowing comes with a lots of caveats. The coronavirus pandemic has hit the economy at a time when it was already on a downhill drive for the almost two years now and the nine-week long lockdown has completely stalled more than 80 per cent of the economy. According to a report by domestic rating agency India Ratings on Tuesday, the combined gross and net market borrowings of the states will be 4.5 per cent of GDP and 3.3 per cent of GDP, respectively, in the current fiscal (FY21). States' borrowing ceiling is Rs 6.4 lakh crore based on 3 per cent of GSDP for FY21 and the enhanced limit would enable them to borrow an additional Rs 4.28 lakh crore or 5 per cent in FY21. But of this, only 0.5 per cent is immediate and without conditions as the remaining 150 bps more borrowing is linked to states' performance on milestone-based achievement in at least three out of four reform areas outlined by the Centre-reforms in ration cards (one-nation-one-card), power distribution, ease of doing business among others. The agency has also revised budget estimates for FY2020 and FY21 of 20 states, finalized before the lockdown, the nominal gross state domestic product (GSDP) growth projected for FY2020 by these states is mostly upwards of an aggressive 10 per cent. "The fallout of the pandemic will be severe on the economy. The extended nation-wide lockdown will exacerbate the economic downturn as our estimate pegs the nominal GDP growth at 0.9 per cent for FY21," says the report. States have already been faced with a lower-than-budgeted share in central taxes and subdued own revenue growth, when the 21-day lockdown was imposed from March 25. These 20 states constitute nearly 86 per cent of the budgeted aggregate revenue receipts for FY20, which stood at 4.2 per cent lower than budgeted Rs 24.79 lakh crore, primarily led by a 16.2 per cent reduction in the devolution of Central taxes. States, in all likelihood, will face significant slippages from the FY21. The extent of slippage will vary depending on the pace at which economic activity limps back to normalcy. Despite the lockdown relaxations since mid-May, the revenue balance of the states in FY21 is set to worsen, particularly for those which already run sizeable revenue deficit and the states are set to see revenue deficit of 2.8 percent of GDP than the earlier forecast of 0.4 percent. Accordingly, the agency has revised upwards its estimate of gross market borrowings of the states to Rs 8.25 lakh crore in FY21 from its earlier estimate of Rs 6.09 lakh crore, as the states are expected to resort to higher market borrowings to fund fiscal deficit. BEN MR MR

You Searched For "gdp 5 percent" and got 12 results

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Goldman Sachs says national mask mandate could save US from a 5% hit to GDP

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