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<ul class="summary-list"><li>Morgan Stanley estimated that bringing manufacturing back to the US could add $10 trillion to the economy.</li><li>The bank pointed to a 20-year stagnation of the industrial economy as production was sent offshore.</li></ul>The US economy could unlock trillions in value over the next decade if more manufacturing activity comes back to the US, according to Morgan Stanley.After decades of production activity being sent abroad, domestic manufacturing is starting to come back to the US, the bank said, a phenomenon known as <a target="_blank" class="" href="https://www.businessinsider.com/reshoring-trade-investors-safe-haven-bet-regardless-of-election-winner-2024-8">reshoring</a>. If domestic production continues to scale, the economy could gain as much as $10 trillion in value over the next decade, according to Chris Snyder, a US multi-industry analyst at the bank."After decades of offshoring and relying on international supply chains, the pendulum is swinging back toward domestic production," Snyder said in a recent <a target="_blank" class="" href="https://www.morganstanley.com/ideas/thoughts-on-the-market-supply-chain?cid=SM_CORP_YOUTUBE_Morgan+Stanley_20241028&amp;linkId=636499587">episode</a> for Morgan Stanley's "Thoughts on the Market" podcast. "In fact, we believe the US is entering the early innings of <a target="_blank" class="" href="https://www.businessinsider.com/us-economy-reindustrializing-how-to-invest-manufacturing-cyclical-quality-2024-7">re-industrialization</a> — a multi-decade opportunity that we size at $10 trillion and think has the potential to restore growth to the US industrial economy following more than 20 years of stagnation," he added.The <a target="_blank" class="" href="https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/september/">manufacturing sector continued to contract</a> in September, with activity declining for the 22nd month out of the last 23, per the Institute of Supply Management.Still, the sector is showing signs that the US is backing backing away from offshore production. The US's international trade deficit for goods and services declined to $70.4 billion in August, down $8.5 billion from the prior month, according to the <a target="_blank" class="" href="https://www.bea.gov/news/2024/us-international-trade-goods-and-services-august-2024">Commerce Department</a>.The Biden administration, meanwhile, has poured billions into its <a target="_blank" class="" href="https://www.businessinsider.com/us-semiconductor-chip-production-continue-harris-trump-presidency-arizona-jobs-2024-10">push to increase chip production</a> in the US and boost<a target="_blank" class="" href="https://www.businessinsider.com/biden-to-sign-executive-order-to-boost-us-manufacturing-2021-1"> the manufacturing</a> and industrial sectors. As of February of this year, annual investment in new manufacturing facilities hit a record $225 billion, according to a <a target="_blank" class="" href="https://www.jec.senate.gov/public/index.cfm/democrats/2024/4/fact-sheet-the-manufacturing-renaissance-that-will-drive-the-economy-of-the-future">memo</a> from the Senate Joint Economic Committee.Shifting production back to the US is expected to be helped along by new technology, like artificial intelligence and more advanced robotics and automation, Snyder said. That could be a boon for "high-tech" sectors in the US, he later added, pointing to the semiconductor, pharmaceuticals, and advanced manufacturing systems industries.Traditional industrial firms — like those in the auto and aerospace sectors — and companies that invest in more sustainable manufacturing are also expected to benefit from the reshoring shift, he added."All told, these businesses should see shorter supply chains, reduced legal and tariff costs, and a more resilient operational structure."The cumulative effects could be "pretty profound" across the US economy, Snyder said, with the boost to industry and manufacturing bound to raise GDP. Reshoring could also potentially undo the US's trade deficit with other economies, Snyder said."The US — with its robust tech sector and innovation ecosystem — is uniquely positioned to leverage technology to revitalize its manufacturing base," he added.

Bringing manufacturing back to the US is a $10 trillion opportunity for the economy, Morgan Stanley says

<ul class="summary-list"><li>China has announced a local government debt rescue program days after Trump won the US election.</li><li>Trump has threatened tariffs of 60% on Chinese goods, complicating China's economic gloom.</li></ul>China announced a debt rescue program to the tune of $1.4 trillion to save heavily indebted local governments and boost its economy.China's Standing Committee of the National People's Congress — its top legislative body — approved 6 trillion Chinese yuan to refinance local governments' hidden debt over three years, according to <a target="_blank" class="" href="http://politics.people.com.cn/n1/2024/1108/c1001-40357125.html">Xinhua state news agency.</a>Hidden debt refers to off-balance sheet liabilities issued by local government financing vehicles, or LGFV, to finance infrastructure investment.The plan also allows local governments to tap 4 trillion yuan in special local bonds over five years.The announcement came after the legislative body met from Monday to Friday.China's local governments have been struggling to repay their LGFV debt, which the <a target="_blank" class="" href="https://www.imf.org/en/Publications/CR/Issues/2024/08/01/Peoples-Republic-of-China-2024-Article-IV-Consultation-Press-Release-Staff-Report-and-552803">International Monetary Fund</a> estimated to be around 60 trillion as of last year. It's another risk to China's economy, which has been struggling with a <a target="_blank" rel="noopener" href="https://www.businessinsider.com/china-real-estate-property-market-speculation-debt-crackdown-xi-jinping-2023-8?utm_medium=ingest&amp;utm_source=markets">property crisis,</a> deflation, and high youth unemployment.Reuters reported last week that China's top legislative body was considering a plan to raise $1.4 trillion in extra debt over the next few years to fund part of an economic rescue package.As early as Monday, Chinese Premier Li Kiang drummed up market expectations for more <a target="_blank" class="" href="https://www.businessinsider.com/china-economy-li-qiang-fiscal-stimulus-market-sentiment-us-election-2024-11">economic stimulus</a>, saying Beijing has "ample space for fiscal policy and monetary policy."The bumper stimulus came on the heels of Donald Trump's victory in the US presidential election earlier this week, which is likely to change Washington and Beijing's trade relationship.A China hawk, Trump has pledged to slap <a target="_blank" rel="" class="" href="https://www.businessinsider.com/what-us-economy-would-look-like-with-trump-biden-presidency-2024-5?utm_medium=ingest&amp;utm_source=markets">a 10% to 20% tariff</a> on all imported goods. He has threatened tariffs of 60% on goods imported from China.This would put further pressure on China's economy, which is still trying to recover following nearly three years of pandemic curbs.In late September, China rolled out <a target="_blank" rel="" href="https://www.businessinsider.com/china-economy-aggressive-monetary-stimulus-interest-rate-rrr-2024-9?utm_medium=ingest&amp;utm_source=markets">aggressive stimulus</a> that boosted sentiment and spurred a bull run in the stock markets. However, analysts say that Beijing still needs to do more to drive consumption.If Beijing's latest stimulus disappoints, it may be in part due to China's own policy conflicts between its socio-political and economic objectives and the constraints, Vishnu Varathan, Mizuho Bank's chief economist of Asia excluding Japan, wrote in a note a week before the debt rescue announcement.Notably, China may be still holding back to avoid one thing: "the optics of over-reacting to US elections," wrote Varathan.

China just announced an $1.4 trillion plan to rescue its local governments

<ul class="summary-list"><li>China is considering a fresh $1.4 trillion stimulus, <a target="_blank" href="https://www.reuters.com/world/china/eyeing-us-election-china-considers-over-14-trillion-extra-debt-over-next-few-2024-10-29/">Reuters</a> reported.</li><li>The package could be approved next week and would increase in size if Trump wins the election. </li></ul>China could approve a fresh round of stimulus in the next week, and officials in Beijing are eyeing even more aid for the country's economy in the event Donald Trump wins the US presidential election on November 5. <a target="_blank" class="" href="https://www.reuters.com/world/china/eyeing-us-election-china-considers-over-14-trillion-extra-debt-over-next-few-2024-10-29/">A report from Reuters</a> on Tuesday said the country's top legislative body could approve a plan to raise $1.4 trillion in extra debt over the next few years to deploy as part of an economic rescue package. The large fiscal stimulus would be increased if Republican nominee and former President Donald Trump wins the US election, the report says.Sources told Reuters the package would be approved by the Standing Committee of the National People's Congress (NPC) on the last day of its meeting next week.The package amounts to 10 trillion yuan worth of debt, with 6 trillion raised by special sovereign bonds and put largely toward aiding local governments deal with their debts, the report says. The remaining 4 trillion yuan would be raised by local government bonds and put toward idle land and property purchases, the sources told Reuters.The report says the officials are also considering another at least another one trillion yuan aimed at efforts including boosting consumption, and another trillion in capital for large state banks.The whopping $1.4 trillion amounts to over 8% of China's total economic output, but is still short of the country's stimulus measures from 2008 which totaled 13% of the country's GDP at the time.The sources say the measures would be confirmed on the last day of the NPC's meeting next Friday — giving ample time to factor in the results of the US presidential election, which takes place on Tuesday.If Trump is elected, the stimulus package could be higher due to the economic challenges Trump's policies would pose for China, the sources told Reuters. Trump has proposed sweeping 20% tariffs on imports, though he's pitched much steeper 60% tariffs on goods from China. The report comes a month after China announced its first round of stimulus measures, aimed at propping up its economy, which has struggled since reopening following the COVID-19 pandemic. The country has been plagued by a weak property sector and surging local government debt, as well as depressed consumer demand. Analysts appeared unimpressed with the <a target="_blank" href="https://www.businessinsider.com/china-economy-aggressive-monetary-stimulus-interest-rate-rrr-2024-9">initial rounds of stimulus</a>, with several top Wall Street analysts saying the measures aren't enough to solve the issues facing consumption or the <a target="_blank" href="https://www.businessinsider.com/china-economy-housing-property-stimulus-economic-growth-goldman-sachs-2024-10">housing market's structural problems</a>.Some have turned more optimistic on more recent measures, though. Earlier this month analysts from Goldman Sachs <a target="_blank" href="https://www.businessinsider.com/china-economy-growth-beijing-stimulus-reasl-estate-market-goldman-sachs-2024-10">upped their 2024 forecast for China's economic growth</a> from 4.7% to 4.9%, citing recent promises of greater public spending by the government.

China is eyeing $1.4 trillion in fiscal stimulus and even more if Trump is elected, report says

<ul class="summary-list"><li>Goldman Sachs and JPMorgan Asset Management are becoming a bit less bullish.</li><li>Although the US economic outlook is strong, returns may have been pulled forward.</li></ul>A pair of Wall Street juggernauts are getting slightly more skeptical about stocks and bonds, but a compelling investment opportunity may be hiding in plain sight.<div type="image" title="GS 10-year projection" height="1088" width="1508" msid="114505224" hostid="261" sizebytes="75402"></div>Goldman Sachs stole headlines recently by forecasting that <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-sp500-future-returns-decade-forecast-goldman-sachs-2024-10">US equities will only rise 3% a year in the next decade</a>, down from an average annual gain of 13% in the prior 10 years. The firm's rationale is based on a more challenging backdrop characterized by lofty valuations, an unusually high concentration in the market's biggest stocks, increased recession risk, lower profits, and elevated interest rates.<div type="image" title="GS 10-year projection baseline" height="742" width="1010" msid="114505227" hostid="261" sizebytes="35320"></div>Top minds at JPMorgan Asset Management (JPMAM) agree that stocks might not post the returns that investors have come to expect, though they're not nearly as pessimistic.The firm, which manages $3.5 trillion in assets, expects US large-cap equities to appreciate by 6.7% a year in the next 10 to 15 years, according to its yearly long-term capital market assumptions report released on October 21. For reference, JPMAM thinks global stocks will rise between 7.2% and 8.1% a year in that same span.A mid-single-digit annual gain for US large caps is nothing to sneeze at, though it would be down substantially from <a target="_blank" href="https://www.businessinsider.com/how-to-invest-economy-growth-outlook-recession-risk-inflation-jpmorgan-2022-11">7.9% two years ago</a> and <a target="_blank" href="https://www.businessinsider.com/how-to-invest-stocks-bonds-real-estate-outlook-strategy-jpmorgan-2023-10">7% last year</a>.There's a simple explanation for that marginally more tepid outlook: US stocks have been on a tear. And while <a target="_blank" href="https://www.businessinsider.com/stock-market-outlook-prediction-2025-how-to-invest-rally-trader-2024-10">some bulls are emboldened</a> by the S&amp;P 500's excellent track record, JPMAM strategists worry that the market has pulled forward future gains."Near the bottom of all these pages, we put a little statement saying, "Past performance is not indicative of future returns.' That's actually not true," said David Kelly, JPMAM's chief global market strategist, at a press conference about the report. "Past great performance is indicative of a more difficult environment going forward."The S&amp;P 500 is on pace to rise by at least 10% <a target="_blank" href="https://www.macrotrends.net/2526/sp-500-historical-annual-returns">for the fifth time since 2018</a> and the 11th time since the financial crisis, including what's been a 22.7% gain in 2024. That strength, combined with already-rich valuations, led JPMAM to cut its long-term projection for US large caps.<div type="image" title="JPMAM valuations" height="926" width="1038" msid="114505230" hostid="261" sizebytes="32120"></div>However, Kelly said the downward shift was gradual since the economic growth outlook is promising. The firm is calling for US real GDP of 2% in the long term, which is the highest mark since the pandemic, along with 2.4% inflation, which is down for the third consecutive year."The very good news is that we think that the foundations for the US economy and the global economy look better than they did a year ago," Kelly said. "We got through some of our more significant worries on inflation; economic growth looks pretty solid."<div type="image" title="JPMAM US GDP forecast" height="828" width="1032" msid="114505215" hostid="261" sizebytes="15222"></div><h2 id="ee7765b8-415d-46ac-862a-90df145c611f">As the 60-40 portfolio loses steam, real estate can take the baton</h2>Lower stock returns are expected to drag down the traditional 60-40 stock-bond portfolio, which JPMAM now says should fetch 6.4% a year for the next decade or so.That forecast is down from 7% last year and 7.2% heading into 2023, though it's higher than the <a target="_blank" href="https://www.businessinsider.com/alternative-investing-strategy-60-40-portfolio-bitcoin-outlook-inflation-jpmorgan-2021-11">4.3% mark in late 2021</a>, where US large caps were only expected to climb 4.1% a year in the long term after an outstanding rebound from the early pandemic lows.Bonds, which make up the second half of that calculus, have a solid but unremarkable outlook.US bonds broadly are expected to return 4.6% in the long term — down from 5.1% last year and the same as two years ago — while the US 10-year Treasury note is projected to fetch 4.2%, versus 4.6% last year and 4% two years ago. Meanwhile, high-yield bonds should deliver a 6.1% gain in the long term, compared to 6.5% last year and 6.8% two years ago.After accounting for inflation, JPMAM expects the standard 60-40 portfolio to return less than 5% in the long term, and the same is true of large-cap stocks and bonds. While such gains may be satisfactory for some, it would take over 16 years for an investor to double their money.Those looking for a more compelling investment opportunity should consider real estate, according to JPMAM. Unlike stocks and bonds, the firm's projected returns for that asset class are steadily rising, from 5.7% two years ago to 7.5% in late 2023 to 8.1% this year.US core real estate is projected to yield close to 6%, up from just over 4% a few years ago and well above the 10-year's yield of 4.2%. Real estate isn't cheap based on <a target="_blank" href="https://www.investopedia.com/terms/c/capitalizationrate.asp">capitalization rates</a>, which measure how much money a property generates relative to its market value, but JPMAM believes the asset class is an exceptional value relative to other yield-generating investments.<div type="image" title="Real estate vs 10-year yield" height="924" width="1032" msid="114505221" hostid="261" sizebytes="34048"></div>"If you were to look at this on a spread basis, the cap-rates spread would tell you that real estate looks a little bit expensive," said David Lebovitz, a global market strategist for JPMAM, at the conference. "But if you look at the all-in yield and think of that as your valuation and your starting point, we're looking at a generational opportunity."Monica Issar, JPMorgan Private Bank's global head of multi-asset and portfolio solutions, echoed that sentiment."This is absolutely the largest generational opportunity to invest in real estate in a long time," Issar said at the conference.Commercial real estate looks especially compelling, Issar said. Unlike residential real estate, which has held up well in recent years — as evidenced by <a target="_blank" href="https://fred.stlouisfed.org/series/MSPUS">remarkably resilient home prices</a> despite <a target="_blank" href="https://www.freddiemac.com/pmms">still-elevated mortgage rates</a> — office buildings have struggled to regain their value since the pandemic ushered in a new era of remote work for millions of Americans.As companies reduced their physical presence or eschewed offices altogether, demand for commercial spaces has taken a massive hit. However, Issar thinks that risk is reflected in prices."All we've been reading about and all we've been seeing is price declines and discussions about empty buildings," Issar said. "This is a time for investors to step in, move into attractive pricing, move into asset classes like non-core real estate."Investors can bet on a commercial real estate rebound by working with <a target="_blank" href="https://am.jpmorgan.com/us/en/asset-management/institutional/investment-strategies/alternatives/real-estate/">JPMAM's team</a>, or on their own through publicly traded real estate investment trusts (REITs). JPMAM didn't outline any specific investments to make, but Issar threw out a few ideas to help investors brainstorm."Think of multifamily housing; think of student housing around campuses; think of cell towers and data centers," Issar said. "That is the modernization of the new direct real estate that is going to be really attractive for investors in the future."

'Generational opportunity': Invest in real estate as stock and bond returns shrink, according to $3.5 trillion JPMorgan Asset Management

The e-commerce market in India is projected to increase significantly to over USD 300 billion by 2030 as the country's <keyword id="20107419" type="General" weightage="20" keywordseo="digital-economy" source="keywords">digital economy</keyword> is set to reach a whopping USD 1 billion by the same year. According to <keyword id="19918506" type="General" weightage="20" keywordseo="Invest-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Invest India" meta.hostid="261" meta.entityid="Invest India">Invest India</keyword>, India's online shopper base will be the 2nd largest globally by 2030, with nearly 500-600 Mn shoppers. Even now, India has the 2nd largest Internet user-base globally with 881 million users. India is moving towards becoming a dominant force in global e-commerce by 2030, driven by a growing digital economy and an expanding internet user base. The data from the investment promotion and facilitation agency Invest India from shows India taking the lead in <keyword id="19957108" type="General" weightage="20" keywordseo="online-shopping" source="keywords">online shopping</keyword>, the e-commerce sector in India is valued at USD 70 billion at present. This makes up for just around 7 percent of the total retail market in the country. However, several factors are likely to contribute a bright future outlook for the sector. <cmsannotation type="cmsannotation" annotationid="Growing internet penetration and digital economy" comment="subhead" text="Growing internet penetration and digital economy">Growing <keyword id="20707509" type="General" weightage="20" keywordseo="internet-penetration" source="keywords">internet penetration</keyword> and digital economy</cmsannotation> Internet penetration across has seen substantial growth, with over 60% of the Indian population (918 million) using the internet by September 2023. Further, an estimated 87 percent of Indian households are projected to have internet access as early as 2025. The time spent accessing the internet via mobile devices has also increased by 21 percent compared to 2019. The affordability of data prices in India is a key factor, with one gigabyte of data priced at around USD 0.17 (Rs 13.5), encouraging a large portion of the population to go online. <keyword id="21457667" type="General" weightage="20" keywordseo="mobile-data-traffic" source="keywords">Mobile data traffic</keyword> has tripled from 2018 to 2023, demonstrating the growing dependence on <keyword id="19979951" type="General" weightage="20" keywordseo="digital-platforms" source="keywords">digital platforms</keyword> for diverse requirements. It is projected that by 2026, 1.18 billion people across the country will have access to smartphones, over 80% of India's population. The increasing number of smartphone users along with higher average data consumption per user, boosts the digital economy. The Unified Payments Interface (UPI) has become a major player in digital payments, handling transactions worth USD 1.5 trillion in 2022. There has been a significant increase in the availability of local language and mobile-first content, with about 73 percent of India's internet users utilizing Indian languages. As a result, there is an estimated regional language user base of 540 million, creating a market worth USD 53 billion. Digital infrastructure like UPI, eKYC, and Aadhaar has cut down the consumer onboarding time by 80 percent, enhancing the digital experience. The Open Network for Digital Commerce (ONDC) is another notable initiative by the Government of India, launched in 2022. It aims to provide equal opportunities to MSMEs to thrive in digital commerce and democratize e-commerce. <cmsannotation type="cmsannotation" annotationid="A transition along with growth" comment="subhead" text="A transition along with growth">A transition along with growth</cmsannotation> In FY 2022-23, Government e-marketplace (GeM) registered its highest ever Gross Merchandise Value of $2011 Bn, shows data from Invest India. The projected growth in online shoppers in India is substantial, with a compound annual growth rate (CAGR) of 22 percent to 88 million in rural India and 15 percent to 263 million in urban India from 2019 to 2026. There is a notable transition towards rural-focused value e-commerce, with more than 60 percent of demand anticipated to come from tier 2-4 towns and rural India by 2026. Government programs such as the National Logistics Policy are designed to streamline deliveries to remote areas, improving the efficiency and cost-effectiveness of logistics. The quick commerce market in India's hyperlocal mobility sector is also projected to grow exponentially to achieve a market size of USD 5.5 billion by 2025. Leading companies like Swiggy and Zomato are at the forefront of the market, while startups like Zepto are also gaining substantial market share. <keyword id="20873923" type="General" weightage="20" keywordseo="social-commerce" source="keywords">Social commerce</keyword>, a new trend that uses social networks and digital media to connect buyers and sellers, is also projected to achieve a market size of USD 70 billion by 2030, with small video applications gaining significant popularity. Significant mergers and acquisitions have been observed in the e-commerce sector, with companies such as Zomato and PhonePe making strategic decisions to enhance their positions. Government schemes like Jan Dhan Yojana, BharatNet Project, and the implementation of Goods &amp; Service Tax (GST) have been instrumental in shaping India's digital economy. (With inputs from ANI)

India's e-commerce market set to skyrocket as the country's digital economy surges to USD 1 Trillion by 2030

<ul class="summary-list"><li>Last week, Trump was said to be deciding between two leading candidates for Treasury Secretary.</li><li>Reports say Trump has been having second thoughts and is expanding his search to four major prospects.</li></ul>Two weeks after securing his return to the White House, president-elect Donald Trump has swiftly been forming his Cabinet for 2025.Trump already announced six of the people he wants to lead the <a target="_blank" class="" href="https://www.businessinsider.com/donald-trump-white-house-staff-cabinet-picks-list-2024-11#marco-rubio-4">15 executive departments</a>, including Robert F. Kennedy Jr. for the Department of Health and Human Services and Florida Sen. Marco Rubio for the State Department.He appears to be taking a slower pace as he chooses his nominated successor to Janet Yellen, the current Secretary of the Treasury.The new Treasury Secretary will likely have two immediate tasks: Helping the US avoid default when the national debt ceiling expires in January 2025 and <a target="_blank" class="" href="https://www.businessinsider.com/tax-cut-tariff-plan-outlook-presidential-election-scenarios-harris-trump-2024-10">extending the 2017 Trump tax cut</a>, which is worth trillions and is mostly set to expire next year.The president-elect was initially said to be considering just two candidates, but <a target="_blank" class="" href="https://www.wsj.com/politics/elections/trump-broadens-hunt-for-top-treasury-job-after-jostling-became-messy-e20eb6b6">The Wall Street Journal</a> and <a target="_blank" class="" href="https://www.nytimes.com/2024/11/17/us/politics/trump-treasury-candidates.html">New York Times </a>reported that he's been having second thoughts and expanded the list to four prospects.With Trump seemingly still unsure over his choice, it's also possible that another candidate may emerge.Here are the top picks Trump is reportedly now considering for Secretary of the Treasury. A press contact for Trump's transition team did not respond to a request for comment from BI.<h2 id="ac3f4426-a376-4840-ad0c-600691195aaa">Kevin Warsh</h2><div type="image" title="Kevin Warsh is dressed formally and sits as speaks at a panel with three other people." height="2558" width="3837" msid="115408301" hostid="261" sizebytes="1354142"></div>Warsh, 54, is a former Morgan Stanley banker and one of the newer contenders.He was an economic advisor to President George W. Bush from 2002 to 2006 and a governor of the Federal Reserve Board from 2006 to 2011. During the latter period, Warsh was a central figure in shaping the nation's response to the 2007-2008 financial crisis, working to rescue major ailing banks.More recently, he's been working on Trump's transition team, helping with economic policy and personnel, according to The Journal.Warsh appears to have been in the president-elect's good graces for several years. <a target="_blank" class="" href="https://www.axios.com/2019/02/03/trump-compliments-powerful-men-handsome">Axios reported</a> that Trump praised Warsh as a "really handsome guy" when the two met in 2017 at the White House.Trump had been <a target="_blank" class="" href="https://www.cnbc.com/2017/10/03/kevin-warsh-would-take-a-hammer-to-the-fed-but-he-wouldnt-break-it.html">floating Warsh</a> that year as a frontrunner for Fed chair. He eventually picked Jerome Powell for the role.Warsh is often seen as a financial hawk, <a target="_blank" class="" href="https://www.cnbc.com/video/2024/10/24/former-fed-governor-kevin-warsh-the-fed-doesnt-seem-to-have-a-serious-theory-of-inflation.html">saying in October</a> that he believed the Fed "doesn't seem to have a serious theory of inflation" and <a target="_blank" class="" href="https://www.wsj.com/articles/interest-rates-are-a-sideshow-in-the-fed-drama-economy-monetary-policy-central-bank-53bb6d9e">writing in July</a> that it moved too slowly to curb surging prices.In his July commentary, he blamed inflation on "irresponsible government spending and excessive money printing." Warsh has also been critical of America's burgeoning debt.<h2 id="73ed19fc-c4d6-4b1c-af49-0c08335e71cb">Marc Rowan</h2><div type="image" title="Marc Rowan speaks at a financial leaders' summit in Hong Kong." height="2100" width="3150" msid="115408297" hostid="261" sizebytes="210070"></div>Rowan, 62, is a billionaire investor who leads Apollo Global Management, which he cofounded in the 1990s. It now has nearly $700 billion in assets under management. Apollo recently announced that it plans to double its assets under management to $1.5 trillion by 2029.The Journal and the Times reported that Rowan, like Warsh, is one of Trump's new candidates.The Journal, citing people familiar with the matter, reported that while the billionaire's aides are in touch with Trump, Rowan isn't actively trying to secure the Treasury Secretary role and hasn't spoken to Trump personally about such a position.But the Times also wrote that Trump has been telling his staff that he's impressed with Rowan, who Bloomberg estimates to be <a target="_blank" class="" href="https://www.bloomberg.com/billionaires/profiles/marc-j-rowan/">worth $10.9 billion.</a> Rowan has said that US economic concerns must be fixed by what he called <a target="_blank" class="" href="https://finance.yahoo.com/news/apollo-ceo-marc-rowan-elon-musk-represents-wholesale-change-and-the-us-needs-it-155238301.html">"wholesale change,"</a> which he said Trump and his new administration would bring.That's broadly in line with how Trump has framed his Cabinet picks, as key movers who will upset the status quo and push fresh reform.Rowan has kept a relatively low profile on his views about government policy, though he recently voiced <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-10-02/apollo-ceo-rowan-warns-that-aggressive-rate-cuts-could-backfire">concerns</a> that the Fed could overstimulate the economy with interest rate cuts.<h2 id="e6cea6ab-a68b-4816-b297-f3f995f40039">Howard Lutnick</h2><div type="image" title="A man stands at a Trump/Vance podium" height="2769" width="4300" msid="115408282" hostid="261" sizebytes="238422"></div>Lutnick, 63, is the CEO of Cantor Fitzgerald, a Wall Street financial services firm.Lutnick has been serving as Trump's transition cochair with Linda McMahon, of WWE royalty. He's been a friend of the president-elect for decades, repeatedly holding fundraisers for Trump.In August, Lutnick hosted an <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-08-09/with-lutnick-s-help-trump-raises-15-million-at-hamptons-event">event at his home</a> in the Hamptons that raised $15 million for the Trump-Vance campaign.Lutnick has aligned himself closely with Trump's rhetoric. In late October, he expressed a vision for the US economy, describing America in the year 1900 to a crowd at Madison Square Garden, saying it was a time when the "economy was rocking.""We had no income tax, and all we had was tariffs," <a target="_blank" class="" href="https://www.youtube.com/watch?v=x1b4UZn1GAk&amp;ab_channel=HowardW.Lutnick">he said to a cheering stadium.</a> Lutnick has also said that under Trump, corporate taxes would be raised for US giants like Apple and Tesla. He said that Elon Musk, a Trump ally, welcomed such a move if it applied to all big players. <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-trump-lutnick-treasury-secretary-bessent-2024-11">Musk has endorsed Lutnick</a> for Treasury Secretary.Lutnick is also known for steering Cantor Fitzgerald after the 9/11 attack, which killed 658 of its 960 employees at the World Trade Center.<h2 id="4b1b9607-5cdd-4853-b1e5-347ec1d4ffa3">Scott Bessent</h2><div type="image" title="A man in a red vest and blue sweater goes for a walk" height="2931" width="4396" msid="115408293" hostid="261" sizebytes="791788"></div>Bessent, 62, was one of the original frontrunners for Trump's Treasury Secretary.His involvement emerged early last week when <a target="_blank" class="" href="https://www.reuters.com/world/us/bessent-paulson-lead-us-treasury-secretary-under-trump-sources-say-2024-11-08/">Reuters reported</a> that the founder of macro investment firm Key Square Capital Management had been meeting with Trump at the Mar-a-Lago resort.Bessent worked for the liberal philanthropist George Soros from 1991 to 2015, making a name for himself by betting big against the British pound, which collapsed in 1992, and then against the Japanese yen as it weakened in 2013.He left Soros' firm in 2015 to start Key Square, and <a target="_blank" class="" href="https://www.wsj.com/politics/elections/the-ex-soros-executive-who-is-trumps-new-obsession-4be2d493">The Journal</a> reported that he hasn't spoken to the billionaire in years.Bessent has been vocal in his support for Trump, telling <a target="_blank" class="" href="https://www.breitbart.com/politics/2024/08/18/exclusive-scott-bessent-kamala-harris-economic-illiterate-will-crash-economy/">Breitbart</a> in August that Vice President Kamala Harris would have crashed the economy if she was president.He wrote <a target="_blank" class="" href="https://www.wsj.com/opinion/markets-hail-trumps-economics-he-will-repair-biden-damage-pro-growth-investment-boost-f3954dbe?">an opinion column</a> just after the election, praising Trump for a stock market rally after his win and knocking <a target="_blank" class="" href="https://www.cnn.com/2024/10/23/politics/nobel-prize-economists-harris-economic-plan/index.html">23 Nobel Prize-winning economists</a> for predicting that the president-elect's agenda would be "counterproductive."The investor laid out his ideas for the economy in his written piece, calling for the Trump administration to reduce government borrowing and to reform President Joe Biden's policies for investment in a "quixotic energy transition."Like Lutnick, he's <a target="_blank" class="" href="https://www.foxnews.com/opinion/scott-bessent-talk-tariffs-its-time-revitalize-alexander-hamiltons-favorite-tool">advocated for an economy</a> that's more reliant on tariffs and weaned off income tax, saying the move would restore America's position on the world stage and help curb China's growth.However, The Journal reported that some conservatives in Trump's circle were concerned about Bessent's past experience working for Soros, who has attracted the ire of the MAGA base for his support of left-leaning causes.

Meet the top 4 candidates Trump is considering for Secretary of the Treasury

<ul class="summary-list"><li>A recession looks likely for the US economy by early 2025, according to Steve Hanke.</li><li>That's evident in the contraction in the money supply, a rare signal that's only flashed four time in the last century.</li></ul>The US economy is poised to enter a recession, as evidenced by a rare economic indicator with a perfect track record of signaling a downturn, according to top economist Steve Hanke.The Johns Hopkins professor issued a bearish outlook on the US economy in an <a target="_blank" class="" href="https://www.youtube.com/watch?v=MllGOaKXjSA">interview</a> with the wealth advisory firm Wealthion on Tuesday. His forecast is tied to a troubling backdrop for the US on a big-picture level, Hanke said, pointing to the <a target="_blank" class="" href="https://www.businessinsider.com/money-supply-recession-unemployment-inflation-us-economy-outlook-jeremy-siegel-2023-12">contraction in the money supply</a>, or the total stock of money flowing around the economy.M2, one type of the money supply, boomed during the pandemic amid loose monetary policy but has fallen over the past few years. The total stock of M2 money supply was around $21 trillion in June — 3% lower than its peak in 2022, when the money supply measured at around $21.7 trillion, according to <a target="_blank" class="" href="https://fred.stlouisfed.org/series/M2SL#">Federal Reserve</a> data.<div type="image" title="M2 money supply graph" height="450" width="1140" msid="112660679" hostid="261" sizebytes="14356"></div>An outright contraction in the money supply, which functions as "fuel" for the economy, is unusual, Hanke noted. It's only happened four times since 1913 — and was followed by a recession or an economic depression in each instance.The M2 money supply began expanding again in June of this year, but changes in the money supply take time to work their way through in the economy, with a lag of one to two years, he added."We will enter a recession either late this year or early next year in the United States, and that's why we think the inflation numbers will keep coming down," Hanke predicted.The outlook for a downturn is also supported by smaller, micro-level indicators in the economy, Hanke said.The job market, for one, has been steadily weakening, with recession fears recently spiking after the <a target="_blank" class="" href="https://www.businessinsider.com/unemployment-rate-job-growth-july-labor-market-economic-data-2024-7">unemployment rate spiked</a> to 4.3% in July — its highest level since the pandemic.Consumers also appear ground down by inflation and are pulling back on spending. <a target="_blank" href="https://www.businessinsider.com/shoppers-spending-less-retailers-brands-cutting-prices-economy-explained-why-2024-7">Retail sales have slowed</a> from their rapid clip several years ago, when at-home shopping fueled an <a target="_blank" class="" href="https://www.businessinsider.com/consumer-slowdown-recession-shopping-retail-spending-expectations-us-economy-outlook-2023-11">American spending boom</a>.Certain areas of the economy already look to be in a slowdown, some forecasters have noted. <a target="_blank" class="" href="https://www.businessinsider.com/housing-market-outlook-home-sales-affordable-inventory-demographics-population-property-2024-1">Housing activity has been slugged over the past few years</a> as high mortgage rates weigh on the demand for homes. <a target="_blank" href="https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/july/">Manufacturing activity</a>, meanwhile, continued to decline in July, with the sector contracting for the 20th month out of the last 21 months, per the Institute for Supply Management."If you look at the micro data, it's kind of consistent with this macro, monetary picture that I just gave you, of slowing down going into recession, inflation continuing to come down. That picture is, if you look micro, individual companies or sectors of the economy … those sectors look like a slowdown is in the wind," Hanke said.Markets remain on high alert for signs of a potential downturn. Investors think there's a 62% chance the Fed will cut rates 100 basis points or more by the end of the year, according to the <a target="_blank" class="" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME FedWatch tool</a>, a sign that traders anticipate the Fed hastily loosening monetary policy to avoid a recession.

The economy is flashing a recession signal that's only been seen 4 times in the last century, veteran economist Steve Hanke says

<ul class="summary-list"><li>Goldman Sachs analysts upgraded their growth forecast for China from 4.7% to 4.9% for this year.</li><li>Recent comments from officials suggest a higher debt ceiling and more construction starts by the end of the year.</li></ul>China may not fall too short of its growth targets this year after all, Goldman Sachs analysts said. The analysts upgraded their 2024 forecast for China's GDP from 4.7% to 4.9% after officials in Beijing pledged a new round of stimulus measures. That's just shy of Beijing's goal of 5% economic growth. "The latest round of China stimulus clearly indicates that policymakers have made a turn on cyclical policy management and increased their focus on the economy," the analysts said in a Sunday note.They said their upgrade was largely based on promises of greater public spending from the Ministry of Finance at a highly-anticipated press conference on Saturday.Officials said that 2.3 trillion yuan ($15.4 billion) of local government special bond funds will be used in the fourth quarter of this year, suggesting a higher government debt ceiling, or "the largest in recent years."The analysts said that the announcement indicates "a more back-loaded fiscal impulse and a larger rebound in growth from Q3 to Q4 than we previously anticipated."The analysts from Goldman also pointed to fuel for near-term construction starts.Last week, China's top economic planning agency, the National Development and Reform Commission, said it would pre-approve 200 billion Chinese yuan ($28.2 billion) of next year's projects by the end of October, presumably to begin construction before the end of the year.They said that effort could help the country's GDP growth get closer to the "around 5%" target for 2024, which <a target="_blank" class="" href="https://www.businessinsider.com/china-growth-targets-axa-investment-property-sector-industrial-production-2024-9">looked increasingly unlikely</a> for most of this year. The analysts also upgraded their growth forecast for next year, from 4.3% to 4.7%. They say that while China's struggling property market will continue to weigh on the economy and as export volume slows from its massive growth this year, the step-up in the latest stimulus is still more policy easing than they had originally accounted for.The analysts add that while they upgraded forecasts for the near term, they still see major structural headwinds <a target="_blank" class="" href="https://www.businessinsider.com/china-economy-growth-stimulus-demand-emerging-markets-world-bank-2024-10#:~:text=China's%20officials%20previously%20said%20the,goal%20is%20out%20of%20reach.">in the long-term</a>."While we have upgraded our cyclical view on the back of the more forceful and coordinated China stimulus, our structural view on China's growth has not changed," the analysts said."The '3D' challenges - deteriorating demographics, a multi-year debt deleveraging trend, and the global supply chain de-risking push are unlikely to be reversed by the latest round of policy easing," they added.China's recent stimulus pushes have aimed to prop up its weak economy, which has been plagued by a <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/chinese-property-stocks-homebuying-restrictions-stimulus-shanghai-gdp-2024-9?_gl=1*l9qswn*_ga*MTY3OTgyNjg0MS4xNzIxMDE2MDM2*_ga_E21CV80ZCZ*MTcyODkxOTI0NC4yNjMuMS4xNzI4OTE5Mzg3LjU1LjAuMA..">struggling property sector</a> and <a target="_blank" class="" href="https://www.businessinsider.com/pets-sports-disney-linabell-china-consumer-economy-demand-spending-property-2024-9">weak domestic demand</a>.

Goldman Sachs raises China growth outlook on optimism over Beijing's fresh push to revive struggling economy

<ul><li>73% of skilled aspirers and 59% of home-based <keyword id="53533" type="General" weightage="20" keywordseo="entrepreneurs" source="Orion">entrepreneurs</keyword> express a strong readiness to pay for <keyword id="6418027" type="General" weightage="20" keywordseo="skill-development" source="Orion">skill development</keyword>. </li><li>The gap between skill demand and the willingness to invest in acquiring those skills presents a huge opportunity for entrepreneurs to develop solutions </li><li>Governments and <keyword id="8182685" type="General" weightage="20" keywordseo="nonprofit-organisations" source="Orion">nonprofit organisations</keyword> hold the potential to address the employability-skilling gap for around 130 million individuals through <keyword id="871433" type="General" weightage="20" keywordseo="skill-enhancement" source="Orion">skill enhancement</keyword> endeavours. </li></ul>Almost 50% of young workers in India show a strong willingness to learn new skills for improved job opportunities. This enthusiasm is observed within distinct segments, including moderately high-skilled blue/grey-collar workers under 30 (skilled aspirers), those engaged in low to semi-skilled jobs (tenacious strivers), and females under 30 pursuing or desiring to initiate home-based businesses (home-based entrepreneurs), reveal the findings of report titled ‘The Next Frontiers: Skilling and Employability Solutions for the Next Half Billion', by Omidyar Network India (ONI), an impact-focused investment firm. The report delves into the prospect within the Indian market to provide skill development and employment opportunities for a substantial segment of unskilled, <keyword id="18583019" type="General" weightage="20" keywordseo="low-skilled" source="Orion">low-skilled</keyword>, and moderately-skilled workers. The research partnership for this project was with Redseer. The launch event occurred on Tuesday and was graced by Atul Kumar Tiwari, Secretary at the Ministry of Skill Development and Entrepreneurship, Government of India, along with Ved Mani Tiwari, Chief Executive Officer of the National Skill Development Corporation (NSDC). <cmsannotation type="cmsannotation" annotationid="Adding 100 million workers to the workforce can boost GDP by 20%" comment="subhead" text="Adding 100 million workers to the workforce can boost GDP by 20%">Adding 100 million workers to the workforce can boost GDP by 20%</cmsannotation> The report highlights prospects for entrepreneurs, government bodies, and nonprofit organisations to create solutions or encourage technology-driven skill development and job opportunities. It studies 580 million Indian workers needing skill enhancement and employment aid and pinpoints specific groups with a strong desire to upskill and invest in those abilities, potentially positively impacting 230 million individuals. The findings reveal that adding 100 million workers to the workforce can boost GDP by 20%, steering India's economy towards a $4 trillion mark. <cmsannotation type="cmsannotation" annotationid="Huge prospects for entrepreneurs in skill development" comment="subhead" text="Huge prospects for entrepreneurs in skill development">Huge prospects for entrepreneurs in skill development</cmsannotation> The report emphasises a substantial opportunity for entrepreneurs in the form of a market consisting of 100 million young workers seeking skilling solutions. Among these segments displaying eagerness to acquire new skills, a significant portion also exhibit a high willingness to invest financially. Specifically, 73% of skilled aspirers and 59% of home-based entrepreneurs express a strong readiness to pay for skill development that promises better employment prospects, stability, and growth opportunities. Among the skilled aspirers, 45% of men show keen interest in entrepreneurship, while 33% of women are more inclined towards advancing in their current roles. These segments represent untapped potential that could significantly enhance employability and positively impact a substantial part of India's workforce. The gap between skill demand and the willingness to invest in acquiring those skills presents an estimated opportunity for entrepreneurs to develop solutions valued at approximately $1.5 billion to $2billion (₹12,570 crore to ₹16,760 crore). Notably, the key areas for skill development where entrepreneurs can contribute include fundamental business management skills, digital marketing, communication, and advanced vocational skills. <cmsannotation type="cmsannotation" annotationid="Government and nonprofit entities can help bridge the skills gap" comment="subhead" text="Government and nonprofit entities can help bridge the skills gap">Government and nonprofit entities can help bridge the skills gap</cmsannotation> Governments and nonprofit organisations hold the potential to address the employability-skilling gap for around 130 million individuals through skill enhancement endeavours. The report highlights that although certain segments exhibit a strong willingness to acquire new skills, their readiness to invest financially in learning opportunities remains relatively low. As a result, these segments are excluded from the pool targeted by entrepreneurs and profit-driven initiatives. To cater to such populations, the government and nonprofit entities can bridge the disparity between the desire to acquire skills and the readiness to invest. This can be achieved through initiatives like subsidised skill development programs, bolstering apprenticeship initiatives, and providing capital support programs. Moreover, policy reforms in areas such as paid childcare and parental leave can significantly contribute to the inclusion and retention of workers within the employability spectrum, particularly among women seeking to enter or continue in the workforce.

India shows eagerness to upskill as it aims at a $4 trillion economy

<ul class="summary-list"><li>The US job market is flashing signs that hiring is about to pick up, according to Torsten Slok.</li><li>The Apollo chief economist said strong spending should boost the job market. </li></ul>The US labor market is due for a rebound, with hiring poised to pick up as soon as this month, according to Apollo Global Management chief economist, Torsten Slok.In a note to clients, Slok issued a more positive outlook on the US job market, even as hiring has slowed this year. His outlook is largely tied to increased spending, which should fuel economic growth spur more hiring, he said."It is inconsistent to say that the incoming economic data is strong but the labor market is weakening," Slok wrote. "With the data for consumer spending, capex spending, and government spending still strong, we should soon begin to see a rebound in nonfarm payrolls and a decline in the unemployment rate."The<a target="_blank" class="" href="https://www.businessinsider.com/unemployment-rate-job-growth-interest-rate-cuts-federal-reserve-recession-2024-9"> US added 142,000 jobs in September</a>, lower than the 164,000 jobs economists expected.However, consumption and business spending data have been strong in recent months. <a target="_blank" href="https://markets.businessinsider.com/news/stocks/stock-market-today-retail-sales-consumers-outlook-fed-rate-cut-2024-9?utm_medium=social&amp;utm_campaign=business-sf&amp;utm_source=facebook">Retail sales unexpectedly rose</a> in August, while capital expenditures across all sectors <a target="_blank" href="https://fred.stlouisfed.org/series/BOGZ1FA895050005Q">rose to $8.2 trillion</a> last quarter, according to Fed data.Slok pointed to four data points that suggest hiring is bound to rev up:<h3 id="480919d0-24d4-44a3-bc22-684afad53ab4">1. Jobless claims are falling</h3>Jobless claims slumped to 219,000 the last week, according to the Bureau of Labor Statistics. Given the historical relationship between jobless claims and new jobs added, that suggests the economy could see as many as 300,000 jobs added in September, Slok predicted, more than doubling the prior month's gains.<div type="image" title="Graph projecting job gains in September 2024" height="939" width="1419" msid="113609600" hostid="261" sizebytes="58020"></div><h3 id="41ffd7bf-26c3-4b4d-8b86-280e1af5a4f3">2. GDP is rising</h3>The economy continues to grow, which is good news for the labor outlook. GDP is expected to grow 2.9% this quarter, according to the Atlanta Fed's latest <a target="_blank" class="" href="https://www.atlantafed.org/cqer/research/gdpnow">GDPNow reading</a>, about the same pace recorded during the <a target="_blank" class="" href="https://www.businessinsider.com/gdp-gross-domestic-product-second-quarter-2024-us-economy-2024-7">second quarter</a>.If GDP does grow at that pace, the economy could be on track to create 240,000 jobs per month over the third quarter, Slok estimated, given the historical relationship between GDP and nonfarm payrolls."In other words, we could see a sharp rebound in job growth in September from the low levels we saw in July and August," he added.<div type="image" title="Graph projecting job gains in September 2024" height="933" width="1399" msid="113609597" hostid="261" sizebytes="47312"></div><h3 id="893b9545-4546-4b7e-b5e5-ef2ba7b4026e">3. Layoffs have been falling</h3>Firms have been easing up on layoffs. That's a positive sign for the job market, given that firings are the leading indicator of a coming downturn, Slok said, citing a recent <a target="_blank" class="" href=" https://www.minneapolisfed.org/research/institute-working-papers/quits-layoffs-and-labor-supply">Fed paper</a> that examined layoffs in the business cycle.Layoff announcements surged during the month of August, but firms had backed away from job cuts over the four preceding months, according to data from the consultancy Challenger, Gray, &amp; Christmas. Since the start of the year, companies have announced 536,421 job cuts, a 3% decline compared to job cuts announced in the same period last year.The <a target="_blank" class="" href="https://fred.stlouisfed.org/series/JTSQUR">quits rate</a>, meanwhile, ticked higher in July, signaling more confidence among workers."During recessions, quits decline as layoffs increase. But this is not what the latest data for layoffs and quits to non-participation show," he added.<div type="image" title="Graph showing announced job cuts" height="1180" width="2706" msid="113609601" hostid="261" sizebytes="44244"></div><h3 id="08141bd5-31d7-45de-b501-11ac3db72c16">4. Mortgage rates are coming down</h3>Mortgage rates have been on the downtrend this year, with the 30-year fixed rate easing to 6.09% the last week, according to Freddie Mac data. If the 30-year fixed rate slumps to around 5%, that could that could spark a rebound in home sales, providing a boost to the economy and job market, Slok said."With financial conditions easing further because of the 50bps Fed cut and still strong tailwinds to economic growth from the CHIPS Act, the IRA, the Infrastructure Act, strong AI spending, and strong defense spending, the bottom line is that there are no signs of the economy entering a recession," Slok wrote. "In particular jobless claims and the Atlanta Fed GDP Now, are pointing to a reacceleration in employment growth over the coming months," he later added.The outlook for the job market, though, remains mixed, with some commentators warning that hiring could continue to slow due to the lagged impact of the Fed's rate hikes. David Rosenberg, one economist who's been calling for a recession for months, predicted the economy could start <a target="_blank" class="" href="https://www.businessinsider.com/job-market-layoffs-recession-employers-firing-workers-economy-david-rosenberg-2024-8">losing jobs by the end of the year</a>, sending the unemployment rate past 5%.

The job market is about to rebound as widespread spending boosts the economy, Apollo chief economist says

<ul class="summary-list"><li>Russia's economy is staring at "near stagnation," according to Anders Åslund.</li><li>The Swedish economist thinks sanctions are biting into economic growth. </li></ul>Russia's economy is coming closer to a near-stop — and Moscow looks bound to run out of resources to fund its war against Ukraine.That's according to Anders Åslund, a Swedish economist who says Russia's economy is taking a bigger hit from Western sanctions than some believe.While Putin has blown off the impact of Western restrictions, sanctions could be knocking off as much as 3% of Russia's GDP each year, Åslund estimated — the equivalent of $56.4 billion a year, given <a target="_blank" href="https://tass.com/economy/1743227">Russia's current dollar GDP</a> of $1.88 trillion in 2023."Contrary to what the Kremlin would like others to believe, time is not on Russia's side," Åslund wrote in an op-ed for <a target="_blank" class="" href="https://www.project-syndicate.org/commentary/russia-war-economy-weakening-under-sanctions-by-anders-aslund-2024-10">Project Syndicate</a> on Tuesday. "My own view is that the current sanctions regime shaves off 2-3% of GDP each year, condemning Russia to near stagnation. Moreover, the situation will get only worse for Putin, perhaps even impeding this campaign of aggression against Ukraine."Russia's GDP technically grew 3.6% last year, with another <a target="_blank" href="https://www.imf.org/en/Countries/RUS">3.2% real GDP growth expected in 2024</a>, according to estimates from the International Monetary Fund. But economists have noted that much of Russia's growth has been fueled by aggressive government <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-ukraine-war-moscow-military-spending-currency-inflation-budget-2024-9">spending on the war</a>, while longer-term indicators of economic health have soured.<a target="_blank" href="https://www.businessinsider.com/russia-economy-outlook-ukraine-war-worker-shortage-population-brain-drain-2024-8">Labor productivity</a>, for instance, dropped more than 3% last year, thanks partly to an ongoing brain drain in the nation's workforce.Russia's energy business, which supplies a major portion of its total revenue is also struggling. Moscow's <a target="_blank" href="https://markets.businessinsider.com/news/commodities/russian-energy-revenue-crude-oil-prices-gas-exports-sanctions-ukraine-2024-1">oil and gas revenue dropped</a> by nearly a quarter in 2023, thanks to tumbling oil prices and sanctions targeting the nation's energy trade.Inflation, meanwhile, is roaring. <a target="_blank" href="https://tass.com/economy/1847635">Consumer prices rose 8.5% year-per-year</a> the week of September 17, according to official figures from Russia's Economic Development Ministry. It's likely prices are running even hotter than what those figures suggest, Åslund said, pointing to a long history of Russia understating inflation numbers during the time of the Soviet Union."The only sectors of the Russian economy that are growing are the military and related infrastructure, where state-owned companies sell to the state at (probably inflated) administered prices. The rest of the economy is flat at best," Åslund wrote.Russia is also in a tough spot when it comes to financing the war against Ukraine. The nation has had difficulty borrowing cash from other countries after it was shut out of SWIFT, the global financial communications system, which means that the economy is primarily feeding off tax revenues and reserves.Russia has depleted a large chunk of its National Wealth Fund, which had around <a target="_blank" class="" href="https://www.reuters.com/markets/europe/russian-national-wealth-fund-rises-1415-bln-june-1-2024-06-05/">$56 billion</a> left in liquid assets at the start of June, according to data from Russia's finance ministry.While Russia has moved to raise <a target="_blank" class="" href="https://tass.com/economy/1816407">personal</a> and <a target="_blank" class="" href="https://tass.com/economy/1816413">corporate taxes</a>, that's unlikely to make a huge difference in the grand scheme of the Kremlin's finances, Åslund said, as there aren't many bond buyers keen to pick up Russia's debt."Including all the hidden costs, Russia will probably spend about $190 billion, or 10% of GDP, on the war this year, and that figure presumably represents the peak, given the constraints imposed by Western financial sanctions," he added, suggesting Russia could only sustain its war efforts for a limited amount of time. "Whenever Russia can no longer finance a budget deficit, it will have to cut public expenditures, and its non-military outlays have already been pared to the bone."Economists have warned that a <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-outlook-stagflation-recession-inflation-gdp-growth-ukraine-war-2024-9">dark and uncertain</a> future is looming for Russia, with the mounting costs of the war cannibalizing<a target="_blank" class="" href="https://markets.businessinsider.com/news/currencies/putin-russia-economy-ukraine-war-wagner-mutiny-rebellion-west-sanctions-2023-7"> key parts of its economy</a>. At this point, the Kremlin's war spending is likely the only thing preventing the nation from <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-ukraine-war-moscow-military-spending-currency-inflation-budget-2024-9">slipping into an immediate recession</a>, economists told Business Insider.

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