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<ul><li>India's economy grew by 6.3% in Q2 of FY23 as compared to 8.4% growth it had seen in Q2 FY22. </li><li>Analysts predicted that the Indian economy would expand at half of the growth rate of 13.5% recorded in the April-June quarter this fiscal. </li><li>China registered an economic growth rate of 3.9% in July-September, 2022. </li></ul>India's economy grew by 6.3% in the second quarter of the current fiscal, official data released on Wednesday showed. The gross domestic product (GDP) had expanded by 8.4% in the July-September quarter of 2021-22, according to data released by the National Statistical Office (NSO). Analysts had projected the Indian economy would expand at half of the growth rate of 13.5% recorded in the April-June quarter this fiscal. According to rating agency ICRA, the GDP was likely to grow at 6.5% while State Bank of India projected the growth rate at 5.8% in the September 2022 quarter. Earlier this month, in an article published in the Reserve Bank of India (RBI) bulletin, the GDP growth was pegged at 6.1-6.3% in the second quarter of this fiscal year. China registered an economic growth rate of 3.9% in July-September, 2022. ‘Manufacturing disappointed with negative growth rate’ Bank of Baroda report said that the Q2 GDP numbers were slightly lower than their forecast of 6.5%. “While most numbers were on expected lines, manufacturing has been a disappointment with a negative growth rate. In case of manufacturing it has been clearly affected by low growth for the small and medium enterprises (SME) sector as per index of industrial production (IIP) numbers, and fall in profits that has affected value added for the organized sector,” said Madan Sabnavis, chief economist of Bank Of Baroda. He added that the agriculture growth of 4.6% should be viewed with caution as it is early days of Kharif harvest, and the allied sectors are more likely to have pushed up this growth rate. “We do expect GDP growth to be around 6.8% for the year, with a downward bias depending on the changing economic environment. But the downside will not be more than 0.2-0.3%,” said Sabavis. Mining and manufacturing sectors have both witnessed negative growth rates. While the mining sector growth might have been affected by a high base effect, combined with fall in output of oil and gas. FY23 GDP downgrades continue In the first quarter of FY23 as lockdowns ended, GDP expanded by 13.5%. However, this was also lower than most estimates – sending many agencies and the RBI itself to revise their growth projections of the year to 7% this September, from 7.2% earlier. On Monday, rating agency <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">Standard &amp; Poor’s said that it </a>now expects India’s GDP to grow at 7% for FY23 as compared to the 7.3% it had estimated earlier. CRISIL estimates mirror S&amp;P’s – as it lowered from 7.3% to 7% – but over a week ahead of S&amp;P. CRISIL also expects FY24 growth to slow down further to 6%. Goldman Sachs, like CRISIL, believes that India’s growth momentum will be affected by the fading effects of post-Covid reopening, coupled with higher borrowing costs. A couple of weeks back, it slashed GDP growth expectations to 5.9% next year, as compared to the 6.9% growth of 2022. All in all, most agencies believe that it has become tougher to predict the pace of growth since the pandemic. “We however believe there is somehow a large disconnect between leading indicators and GDP growth since the onset of the pandemic. Growth impulses continue to be strong and it may be better to look through the GDP headline numbers for a couple of quarters before arriving at a definitive conclusion about the growth trajectory,” said SBI Ecowrap in a report released on November 28. (With inputs from PTI) SEE ALSO <a href="https://www.businessinsider.in/finance/news/no-end-to-downgrades-in-gdp-estimates-as-economists-remain-divided-on-severity-of-slowdown/articleshow/95847763.cms">No end to downgrades in GDP estimates as economists remain divided on severity of slowdown</a> <a href="https://www.businessinsider.in/india/news/government-listed-private-companies-capex-to-touch-21-lakh-crore-in-fy23-icici-securities/articleshow/95858117.cms">Capex cycle to touch ₹21 lakh crore in FY23, but there's a catch</a>

India's GDP growth comes in at 6.3% in Q2: manufacturing, mining witness negative growth

New Delhi, Jan 31 () The government on Friday revised downwards the economic growth rate for 2018-19 to 6.1 per cent from 6.8 per cent estimated earlier mainly due to deceleration in mining, manufacturing and farm sectors.
 "Real GDP or GDP at constant (2011-12) prices for the years 2018-19 and 2017-18 stand at Rs 139.81 lakh crore and Rs 131.75 lakh crore, respectively, showing growth of 6.1 per cent during 2018-19 and 7.0 per cent during 2017-18," the National Statistical Office said in revised national account data released on Friday.  KKS CS  ABM

GDP growth rate for 2018-19 revised downwards to 6.1 pc

<ul><li>Cut income tax rate, is the advice of <keyword id="105648" type="PERSON" weightage="20" keywordseo="Bibek-Debroy">Bibek Debroy</keyword>, the Chairman of Prime Minister’s Economic Advisory Council. </li><li>The Union government currently has 28 central schemes and the Debroy believes that some of these expenses can also come under state purview. </li><li>Debroy believes that sectoral sops will create more distortions and complicate the system of taxation even further. </li><li>The country currently has five slabs of Goods and Services Tax (GST) and Debroy believes that it should be streamlined to three. </li></ul> Ironically, the Indian government is facing the same conundrum as any middle class family in the country would---low income and increasing expenses. The country is short of ₹6.5 lakh crore, as per <a href="https://www.business-standard.com/article/news-ians/india-s-2018-19-fiscal-deficit-at-3-39-of-gdp-lower-than-target-119053101722_1.html">estimates in May</a>, mostly due to decrease in tax income. And like a middle class person, the country also saddled itself with expenses which are eating into it. The Union government has come up with many populist schemes at the central level on health, cleanliness and much more. Bibek Debroy, the chairman of Prime Minister’s Economic Advisory Council has a three-point programme to change the sorry state of affairs, especially when the economy itself is slowing down. The economist who has made significant contribution to the game theory, believes that there are limits to public expenditure due to the current situation. Cut direct tax rate Added to that, Debroy has a few things that would aid in the long run. “The direct tax rate can be reduced significantly. The only way to reform direct taxes is to eliminate exemptions for both personal and corporate taxes,” Debroy said. Indian government had promised to bring down the corporate tax rate to 25% from 30% provided all exemptions are done away with. However, as it stands today, firms with an annual revenue of up to ₹400 crore are eligible pay tax at the rate of 25%. On personal income tax, individuals have been given some respite up to an annual income of ₹5 lakhs. However, the government imposed a super rich tax for those with annual income of ₹2.5 crore to 25% from 15%, and those who earn more than that, will be taxed at 37%. However, what Debroy is asking for is a broad-based cut in income tax which may leave more money in the hands of consumers to spend. This may be a timely recommendation given the sharp slowdown in Indian consumption-- from air tickets to car sales, from daily products to discretionary ones, all sectors are facing acute stress from lack of demand. <div type="Article" hostid="261" msid="70730623" title="India's largest bank is asking for a government stimulus to save the upcoming festive season" mstype="2" mssubtype="0"></div>

 Reduce GST slabs The country currently has five slabs of Goods and Services Tax (GST) -- zero, 5%, 12%, 18% and 28%-- and there is a surcharge on some foreign portfolio investments expanding the number of slabs. Debroy believes that it should be streamlined to three. Though he said that he prefers a single slab, it would be impractical. “Everyone wants the 24 per cent to come down to 18 per cent, but no one wants the items under 0 per cent to come under 6 per cent,” he told Indian Express. Let states spend “So, if we think health is important and we want the Union government to spend on health, by the same token, the state government should pay for defence. After all, I have got limitation in terms of resources available for public expenditure, I need to prioritise. That prioritisation cannot be done by the Union government alone, but also by states,” Debroy told Indian Express<a href="https://indianexpress.com/article/business/bibek-debroy-interview-the-key-question-is-are-we-on-a-trend-economic-growth-rate-of-6-per-cent-or-7-per-cent-5915773/"> in an interview</a>. The Union government currently has 28 central schemes and the Debroy believes that some of these expenses can also come under state purview. Say no to sectoral sops A large number of sectors, especially the auto sector, is seeking government incentives to get back on track. Auto sales have been falling for the last nine months, which each month worse than others, leading to job losses and production cuts and even dealership shutdowns. And, the automakers have one hope---sops from the government. But theoretically it could be a bad idea, says Debroy. He believes that sectoral sops will create more distortions and complicate the system of taxation even further. SEE ALSO <a href="https://www.businessinsider.in/hero-motocorp-tata-mahindra-and-maruti-suzuki-are-all-cutting-production-as-theres-no-demand/articleshow/70710729.cms">Hero MotoCorp, Tata, Mahindra and Maruti Suzuki are all cutting production as there’s no demand</a>

Indian Prime Minister's economic advisor has 3 ideas to keep the economy running fast, on its own

<ul class="summary-list"><li>The US economy is not facing a recession, says Apollo chief economist Torsten Sløk.</li><li>Sløk cites strong employment data, wage growth, and consumer spending as key indicators.</li></ul>The US economy is cruising toward a soft landing with no recession on the table, according to Apollo chief economist Torsten Sløk.In <a target="_blank" class="" href="https://www.apolloacademy.com/this-is-a-soft-landing/">a note</a> over the weekend, Sløk analyzed recent employment data and found no signs of an imminent recession and plenty of signs that point to a period of solid and sustainable economic growth."The bottom line is that the US economy is not in a recession, and there are no signs of a recession on the horizon," Sløk said.Some of the encouraging data points for Sløk include the August employment report, which showed a decline in the unemployment rate to 4.2% from 4.3%, even though the 142,000 jobs added to the economy slightly missed economist estimates of 164,000."It is difficult to see strong signs of a slowdown in job creation," Sløk said.Then there's wage growth, which continues to outpace the inflation rate and seems stuck at levels above the pre-pandemic trend of anemic growth. That's a good thing.Wage growth accelerated to 3.8% in August, well above pre-pandemic levels of less than 3%.And with US employment at record levels, with total nonfarm payrolls at 160 million, <a target="_blank" class="" href="https://www.businessinsider.com/hate-spending-consumers-economic-sentiment-retail-sales-inflation-gdp-growth-2024-4">consumers are feeling confident about their spending habits.</a>That's important, as consumer spending is about 70% of the US economy."Daily data for debit card transactions shows that consumer spending has been accelerating in recent weeks," Sløk said. "Weekly data for retail sales went up last week and remains solid."Finally, relatively speaking, few people in the economy seem to be losing their jobs or getting fired.Initial jobless claims and continuing claims have both fallen in recent weeks, and bankruptcy filings have plunged since the start of the year.To top it all off, corporate profits are at record highs and the Atlanta Fed's GDP model suggests third-quarter economic growth of 2.1%, which would follow <a target="_blank" class="" href="https://www.businessinsider.com/gdp-gross-domestic-product-second-quarter-2024-us-economy-2024-7#:~:text=US%20real%20GDP%20increased%20at,than%20the%20first%20quarter's%201.4%25.">the second-quarter's GDP growth rate of 3.0%.</a>That's not something you see right before a recession hits the economy, according to Sløk."This is a soft landing," Sløk said.

All the data is pointing to a soft landing in the US economy, top economist says

<ul class="summary-list"><li>China can't seem to get its economy out of the doldrums. </li><li>Fixed-asset investment posted an unexpected decline in the first half of the year. </li></ul>The world's second-largest economy can't seem to shake off troubles related to its property sector, even as new data shows an increasingly confident consumer.Data released Thursday shows China's fixed-asset investment expanded by 3.6% year-over-year in the first half of 2024, falling short of 3.9%.The weak data was mainly fueled by slowing infrastructure investment, according to analysts from Goldman Sachs, who pointed to a drag from heavy rainfall and flooding.Meanwhile, real estate investment remains the economy's key sore spot, with a 10.8% year-over-year fall.The data shows new-home prices across 70 of the country's biggest cities fell 5.3% year-over-year in July, following a 4.9% decline in June.China's housing market has been battered by <a target="_blank" class="" href="https://www.businessinsider.com/china-economy-housing-market-real-estate-crash-investors-outlook-construction-2024-3">slowing property sales and starts in the last few years</a>, and its struggles seem far from over as a sizable portion of its available housing stock remains empty.One bright spot was retail sales, which increased 2.7% year-over-year in July, above analysts' estimates and up from a 2% increase in June.The jump was fueled by online sales, partly due to the 618 Online Shopping Festival online retail event, which came earlier and lasted longer than usual, the Goldman analysts said.Slowing demand within China <a target="_blank" href="https://www.businessinsider.com/china-economy-weak-domestic-demand-factory-activity-amid-strong-export-2024-7">raised warning signs last month</a>, especially as potential tariffs threaten the country's strong exports.The government has rolled out a range of new policies meant to stimulate consumer spending as well as raise household income in the last few months."We believe the urgency for incremental policy easing is increasing to counteract subdued domestic demand," Golman analysts wrote, adding that otherwise, the country's goal of an approximately 5% GDP growth rate for 2024 may be at risk."Following the pro-growth July Politburo meeting, we expect more demand-side easing measures in coming months -- especially on fiscal, consumption and housing fronts -- and maintain our forecast for sequential GDP growth to rebound in H2 from its Q2 low," the analysts added.

China's economy is still stuck in low gear

The Indian central bank’s rate-setting panel, the Monetary Policy Committee (MPC), has kept the <keyword id="2177983" type="General" weightage="20" keywordseo="repo-rate-unchanged" source="Orion">repo rate unchanged</keyword> at 6.5%, <keyword id="6359111" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="Orion">Shaktikanta Das</keyword>, governor of the Reserve Bank of India (<keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword>), confirmed on Friday. The decision was taken in a majority 4:2 vote by the six-member MPC, headed by <keyword id="7268643" type="General" weightage="20" keywordseo="rbi-governor-shaktikanta-das" source="Orion">RBI Governor Shaktikanta Das</keyword>. This meeting followed closely on the heels of Lok Sabha 2024 election results and a renewed but less robust mandate for the NDA government, spearheaded by Prime Minister Narendra Modi. This marks the eighth consecutive instance where the central bank has maintained the status quo on the benchmark <keyword id="43352" type="General" weightage="100" keywordseo="repo-rate" source="Orion">repo rate</keyword>. It had last increased the repo rate to 6.5 percent back in February 2023. For context, the repo rate is the interest rate at which the RBI lends to banks. When the repo rate is cut, it makes borrowing cheaper for banks, which in turn leads to lower loan rates and consequently, reduced EMIs. "As expected, the MPC has decided to keep the repo rate unchanged at 6.5%. This decision aligns with the MPC's calibrated measures to tackle persistent inflation. The RBI has successfully maintained the resilience of the Indian economy, contributing to sustained growth momentum even amidst a challenging global environment," said Mr Ashwin Chadha, CEO of India Sotheby's International Realty. "The good news is that CPI inflation continues to soften, and the GDP growth rate is projected to remain above 7% for all quarters of FY2024-25. Additionally, the monsoon is expected to be favorable, reducing potential risks to the economy." Governor Das, in his post-policy press conference, also underscored the need for a balanced approach in handling monetary policy. He highlighted the MPC's strategy of gradually scaling back accommodation to ensure that inflation meets the targeted range, while still fostering economic growth. “Monetary policy must continue to remain disinflationary and be resolute in its commitment to aligning inflation to the target of 4 per cent on a durable basis to sustain price stability and outset strong foundation,” the <keyword id="64190" type="General" weightage="20" keywordseo="rbi-governor" source="Orion">RBI Governor</keyword> stated. The RBI has also updated its growth forecasts for the 2024-25 financial year, predicting a GDP growth rate of 7.2%. The projections for each quarter are 7.3% for Q1, 7.2% for Q2, 7.3% for Q3, and 7.2% for Q4. Governor Das pointed out that the risks to this growth outlook are evenly distributed. By maintaining the repo rate at its current level, the RBI signals its cautious stance on balancing the dual objectives of inflation control and economic recovery support. This decision comes at a crucial time, as the global economy contends with uncertainties from geopolitical conflicts and the ongoing impacts of the COVID-19 pandemic. (With inputs from ANI)

Monetary Policy Committee keeps repo rate unchanged at 6.5%, confirms RBI governor Shaktikanta Das

Prime Minister <keyword id="19895781" type="General" weightage="20" keywordseo="narendra-modi" source="keywords">Narendra Modi</keyword> urged CEOs of US majors to take advantage of India's growth story as the country is making all efforts to become the third largest economy of the world in his third term. India is currently the fifth largest economy of the world after the US, China, Germany and Japan with a GDP of around USD 3.9 trillion. India has been the fastest growing large economies of the world with GDP growth rate of over 7 per cent for the last three consecutive years. Addressing CEOs of the large US tech firms on Sunday, Modi said India will make every effort to become the third largest economy in the world in his third term (2024-29). Companies should take advantage of India's growth story for collaboration and innovation by co-developing, co-designing, and co-producing in India for the world, harnessing the opportunities from the country's economic and technological growth, he said. Assuring the business leaders of India's deep commitment to the protection of intellectual property and to fostering tech innovation, Modi highlighted the economic transformation happening in the country, particularly in electronics and information technology manufacturing and semiconductors. Modi asserted that his government was committed to making India a "global hub of <keyword id="20073013" type="General" weightage="20" keywordseo="semiconductor-manufacturing" source="keywords">semiconductor manufacturing</keyword>". The meeting took place at the Lotte <keyword id="19904497" type="General" weightage="20" keywordseo="New-York" source="keywords">New York</keyword> Palace Hotel on Sunday during the second leg of Modi's three-day US visit. It saw the participation of CEOs of 15 major US-based firms working on cutting-edge technologies such as AI, quantum computing and semiconductors. "Had a fruitful roundtable with tech CEOs in New York, discussing aspects relating to technology, innovation and more. Also highlighted the strides made by India in this field. I am glad to see immense optimism towards India," Modi said in a post on X. During the conference, Modi said technology collaboration and efforts such as the Initiative on Critical and Emerging Technologies (ICET) lie at the core of the India-US Comprehensive Global Strategic Partnership, according to a Ministry of External Affairs press release. Organised by the Massachusetts Institute of Technology (MIT) School of Engineering, the CEOs of top US tech firms, including Google CEO Sundar Pichai, Adobe CEO Shantanu Narayena, Accenture CEO Julie Sweet and NVIDIA CEO Jensen Huang attended the meeting. Others who participated in the roundtable included AMD CEO Lisa Su, HP Inc. CEO Enrique Lores, IBM CEO Arvind Krishna, Dr Noubar Afeyan, Chairman of Moderna, and Verizon CEO Hans Vestberg. Modi also talked about India's BIO E3 (biotechnology for environment, economy and employment) policy to develop the country into a biotech powerhouse and on the topic of AI, noted that India's policy is to promote AI for all, underpinned by its ethical and responsible use. The CEOs appreciated India's growing prominence as a global technology hub, driven by its innovation-friendly policies and flourishing market opportunities. They also expressed strong interest in investing and collaborating with India, agreeing that investing in startups would be a synergistic opportunity to innovate and develop newer technologies in the country. Others who attended the conference included Biogen Inc CEO Chris Viehbacher, CEO of Bristol Myers Squibb, Chris Boerner, Eli Lilly and Company CEO David A. Ricks, LAM Research CEO Tim Archer, GlobalFoundries CEO Thomas Caulfield, and the CEO of Kyndryl, Martin Schroeter. "Further cementing technology and business connect. PM @narendramodi interacted with the top tech leaders and CEOs of USA, in a Roundtable hosted by the Massachusetts Institute of Technology School of Engineering, in New York today. PM emphasised India's growth prospects and discussed initiatives to foster collaborations and innovation across diverse sectors," the official account of the MEA said in a post on X. The prime minister had a separate meeting with Krishna P Singh, CEO of Holtec International, which is into nuclear and solar power generation. They discussed Holtec's plan for expanding manufacturing in India and advancing energy cooperation, PMO India said in a post on X. Earlier on Sunday, Modi addressed the <keyword id="20115166" type="General" weightage="20" keywordseo="Indian-diaspora" source="keywords">Indian diaspora</keyword> at the packed Nassau Veterans Coliseum on Long Island in New York. He also held bilateral meetings with world leaders at the sidelines of the UN General Assembly session here. Modi reached New York on Saturday after attending the Quad Leaders' Summit hosted by President Joe Biden in Wilmington, Delaware. <div type="Article" hostid="261" msid="113516805" title="Why is Indian Prime Minister Narendra Modi visiting the US this weekend?" mstype="2" mssubtype="0"></div>

PM Modi invites US CEOs to take a 'byte' out of India's growing technology sector

<ul class="summary-list"><li><keyword id="1645850" type="General" weightage="20" keywordseo="Russians" source="Orion">Russians</keyword> are spending money freely, with consumption per capita surging over 20% from 2021 to 2023.</li><li>The spending comes on the back of an overheated economy, with growth driven by wartime state spending.</li></ul>Russia's economy is booming, and some people are spending generously, sending prices up. Russia posted 3.6%<a target="_blank" href="https://www.reuters.com/world/europe/russian-2024-gdp-growth-seen-matching-2023-36-finance-minister-says-2024-04-19/"> GDP growth last year.</a> The unemployment rate hit a record low of 2.6% in April, as men continued heading to the war's front amid a <a target="_blank" href="https://www.businessinsider.com/russian-economy-brain-drain-labor-shortage-workforce-exodus-capital-flight-2023-9">brain drain.</a> The labor crunch has driven up wages, contributing to high inflation running over 9% on an annual basis — well above the official 4% target. On Friday, the Russian central bank warned — yet again — of an <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-central-bank-governor-nabiullina-warns-overheating-inflation-interest-2023-12">overheating economy</a> when it hiked rates from 16% to 18%in an attempt to rein in price gains. "The GDP growth rates remained high in 2024 Q1 and Q2, while inflation was accelerating. This suggests that overheating in the economy has remained considerable," said Elvira Nabiullina, Russia's central bank governor, on Friday during her rate hike announcement. Despite sweeping sanctions over its invasion of Ukraine in February 2022, <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-how-moscow-pays-war-economy-afloat-sanctions-ukraine-2024-2">Russia's economy</a> hasn't broken down and even appears resilient, as it's now being driven by wartime state spending on military activities and subsidies. <h2>Russians are traveling and spending on culture and hotels</h2>The rate hike from Russia's central bank comes amid a spending boom in the country where many appear to be spending very freely, even amid the war and Western sanctions, as the <a target="_blank" class="" href="https://www.ft.com/content/3e2b2e63-082e-4058-ba92-dea580d4f40c">Financial Times reported on Friday.</a> Overall, consumption per capita has increased by over 20% from 2021 to 2023, with spending on tourism a standout, surging over 90%, according to the FT's analysis of official data. Spending on culture, hotels, transportation services, and personal services has also jumped. A resident in Moscow told the FT that her neighbor has been showing off photos of a pet lion. "Everyone who is upper-middle class, they're just enjoying a really good life," Sergei Ishkov, a Moscow investor and entrepreneur, told the media outlet. "Consumption is booming due to a combination of massive budget spending and labor force shortages leading to strong wage pressures," wrote Bartosz Sawicki, a market analyst at fintechConotoxia, in a Friday note. But military spending, which is around 7% of GDP, is leading to "serious macroeconomic imbalances," Sawicki added. <h2>Russia's central bank may hike rates again if necessary</h2>Nabiullina said on Friday that Russia's GDP will grow 3.5% to 4% this year from a year ago. But next year, it's likely to slow to 0.5% to 1.5% year-over-year growth. She added that the Russian central bank would keep its key interest rate high for as long as needed to bring inflation back to its target. If necessary, it could even impose more rate hikes to reduce economic risks. "Labour force and production capacity reserves have been almost exhausted," said Nabiullina on Friday. "Shortages of these resources might cause a situation where the economic growth will be slowing down despite any attempts to boost demand." Furthermore, any attempt to stimulate demand would only stoke even more inflation. That could create "a scenario of stagflation that could only be stopped by way of a deep recession," she warned, explaining the central bank's steep rate hike. The central bank next meets on September 13.

Some Russians are spending like no tomorrow with 'considerable' overheating in the economy

The residential market shows a positive outlook, with 51% of stakeholders predicting higher sales over the next six months. However, a notable 24% expect stability, while 25% predict a potential decrease, reflecting a balanced yet cautious sentiment, as per a recent <keyword id="19895043" type="General" weightage="20" keywordseo="Knight-Frank" source="keywords" meta.keywordsubtype="org" meta.entityname="Knight Frank" meta.hostid="261" meta.entityid="Knight Frank">Knight Frank</keyword> report. The outlook for residential launches is also positive, with 61% expecting an increase, suggesting continued demand. A more tempered view is held by 20% of respondents who expect stability, and 19% foresee a decrease in launches. The Indian <keyword id="20152263" type="General" weightage="20" keywordseo="real-estate-sector" source="keywords">real estate sector</keyword> continues to reflect a positive outlook for the near future, though with a more cautious approach. In terms of pricing, 63% of stakeholders expect a rise, but 36% anticipate stable prices, and a very small minority predict a decline. G Hari Babu, National President, National Real Estate Development Council (<keyword id="20429653" type="General" weightage="20" keywordseo="naredco" source="keywords">NAREDCO</keyword>), said, "The residential and office markets continue to show notable activity, signaling ongoing growth and opportunity. Developers and other key stakeholders, including banks and financial institutions, are maintaining a positive outlook." He added, "This suggests that while there may be short-term challenges, the sector is well-positioned to adapt and thrive. The continued optimism and activity in the market highlight the sector's ability to sustain its momentum and drive forward, amidst changing conditions." The <keyword id="22822547" type="General" weightage="20" keywordseo="office-leasing-market" source="keywords">office leasing market</keyword> shows signs of strong recovery, with 63% of respondents predicting an increase in leasing activity, driven by positive business sentiments and <keyword id="21313740" type="General" weightage="20" keywordseo="economic-revival" source="keywords">economic revival</keyword>. However, 24% expect stability, and 13% foresee a decline. New office supply also remains a point of interest, with 47% expecting an increase, while 29% anticipate stability, and 24% forecast a decrease. Furthermore, 67% of stakeholders expect office rents to rise, signaling confidence in the market's ongoing growth, even as 27% anticipate stable rents and 7% expect a decrease. The <keyword id="20635920" type="General" weightage="20" keywordseo="future-sentiment-score" source="keywords">Future Sentiment Score</keyword>, which measures stakeholders' outlook over the next six months, saw adjustments across various regions. The North Zone score slightly decreased from 65 in Q1 2024 to 63 in Q2 2024, though it remains firmly optimistic. The South Zone witnessed a more significant drop from 76 to 65, signaling a moderated outlook. In the East Zone, the score fell from 77 to 65, largely influenced by the discontinuation of the 2% stamp duty cut. The West Zone also saw moderation, with the score dipping from 73 to 66, though it too, remains optimistic. The overall Developer Future Sentiment score decreased from 72 to 61, reflecting a more guarded approach. Developers, while cautious, continue to remain optimistic due to strong sales since early 2023. On the other hand, the Non-Developer Future Sentiment core, which includes financial institutions and PE funds, also moderated from 73 to 68. This shift indicates stakeholders' careful consideration of macroeconomic concerns. Optimism in India's broader economic scenario remains strong, with 59% of respondents expecting an improvement, reflecting confidence in the country's economic resilience. However, 24% foresee stability, and 17% predict a decline, underscoring global economic uncertainties. Meanwhile, 51% of respondents anticipate increased funding availability for real estate investments, reflecting continued confidence in the financial sector's support for the real estate market. Shishir Baijal, Chairman and Managing Director of Knight Frank India Pvt Ltd, noted, "As we transition through 2024, a host of factors are playing out globally. The global economic landscape shows resilience despite ongoing challenges. Inflation rates are gradually aligning with central bank targets, enabling a more supportive monetary policy. India, benefiting from stable post-election conditions, remains a strong growth beacon." He added, "Domestic consumption is robust, supported by consumer loans, though there are some signs of growth moderation. Food inflationary pressures persist, but are converging overall towards price stability targets. With a projected GDP growth rate of 7.2% for FY 2025, India's outlook remains positive. An effective monetary policy by the Reserve Bank of India has helped sustain growth with price stability, positioning India as one of the fastest-growing large economies globally." The Current Sentiment score, which reflects stakeholders' view of the market compared to six months ago, moderated from a decadal high of 72 in Q1 2024 to 65 in Q2 2024. This suggests a more measured outlook as stakeholders navigate evolving global economic conditions. Despite the dip, the score remains indicative of optimism. Looking forward, the Future Sentiment index also adjusted from 73 in Q1 2024 to 65 in Q2 2024, signaling a positive yet more conservative outlook for the near term. While macroeconomic uncertainties may dampen enthusiasm, stakeholders continue to show confidence in the sector's resilience and adaptability.

Despite budget provisions, residential housing market will see sales growth, notes recent report by Knight Frank

In April, the <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) governor Shaktikanta Das referred to <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> as the ‘elephant in the room’. He said, “The elephant has now gone out for a walk and appears to be returning to the forest. We would like the elephant to return to the forest and remain there on a durable basis… Elephant moves slowly, and last mile inflation tends to be sticky.” On Friday, the Indian government data showed that the year-on-year inflation rate based on the Consumer Price Index (<keyword id="20468215" type="General" weightage="20" keywordseo="CPI" source="keywords">CPI</keyword>) for June 2024 stood at 5.08 per cent — rising from 4.75% last month. This was the first time the headline inflation had risen since December 2023! Looks like the elephant decided to stop and look back on its way to the forest. The question remains, what’s next — will it return to the forest or return to the room to haunt us again? <h2>Food price inflation at a record high</h2> The major driver for the higher inflation figures this month has been the rising <keyword id="19960157" type="General" weightage="20" keywordseo="food-prices" source="keywords">food prices</keyword> across India. In fact, food price inflation almost doubled year-on-year in June, rising to 8.36 per cent last month compared to 4.63 per cent in June 2023. Inflation in the food basket was 9.36 per cent in June, up from 8.69 per cent in May, according to the data of the National Statistical Office (NSO). Government data showed that <keyword id="513422" type="General" weightage="20" keywordseo="retail-inflation" source="Orion">retail inflation</keyword> for all food segments, including cereal, meat, eggs, milk, oils, fruits, vegetables, pulses, sugar, spices, prepared snacks, and sweets, increased month-on-month. This was the main cause for retail inflation hardening in June, diverging from the previous months' moderation. While the inflation rate based on the all-India CPI for June 2024 stood at 5.08%, rural and urban inflation rates also spiked to 5.66 per cent and 4.39 per cent, respectively. “Barring the food basket, inflation is indicating signs of bottoming out broadly across the non-food categories, also seen in the inflation in the core categories averaging at 3.5% in the last six months. A stable monsoon will play an important role in stabilising food prices and inflation levels over the next few months,” said Vivek Rathi, National Director Research, Knight Frank India. In May, annual retail inflation was at a 12-month low of 4.75%, slightly down from April's 4.83%. In December last year, retail inflation stood at 5.7 % and had been moderating until June. On the other hand, the US CPI rose only 3% on an annual basis in June versus expectations of 3.2%. Month-over-month, the US CPI declined 0.1%, on expectations for a 0.1% rise. <h2>There goes the chance of an early rate cut?</h2> While European central banks started to cut interest rates last month, hopes of such policy moves seem to have been derailed by these inflation figures. Indian central bank, RBI, has remained cautiously focused on inflation as the growth prospects remained robust. It has been waiting for the final phase of disinflation to materialise before considering rate cuts. The situation, however, does seem rather peculiar — as long as inflation does not align with the central bank's 4% target, the interest rates may remain rather high. However, the current economic environment is not gloomy at all, characterized by a robust GDP growth rate, estimated at 8.2% for 2023-24. Hence, the RBI adopts a wait-and-see approach. And the wait is likely to continue a little while longer. This year, food prices have become a significant issue for policymakers in India, and the RBI governor pinned his hopes on a good monsoon season to alleviate the food price inflation concerns. So far, the monsoon has stood up to our expectations, yet the food prices have remained stubbornly high, mainly due to extended heat wave conditions in June. "The CPI inflation came marginally higher than our expectations. While the <keyword id="67286" type="General" weightage="100" keywordseo="food-inflation" source="Orion">food inflation</keyword> risks will continue to dominate in the near term, we expect better sowing patterns and spatial distribution of rains to eventually ease the price pressures beyond these volatile months. Having said that, the central bank will be in no hurry to ease <keyword id="20104157" type="General" weightage="20" keywordseo="monetary-policy" source="keywords">monetary policy</keyword> given the headroom from robust growth in the backdrop of near-term inflation risks," said Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank. India's retail inflation remains within the Reserve Bank of India's (RBI) comfort range of 2-6% but exceeds the ideal 4% scenario. While inflation is a global concern, India has so far managed its inflation trajectory relatively well. Since May 2022, the RBI has raised the repo rate by 250 basis points cumulatively to combat inflation. However, over the last eight policy cycles, the central bank has kept the rates consistent at 6.5%. The next monetary policy meeting of the RBI is scheduled for early August. And with the higher-than-expected inflation data, the central bank is likely to keep the rate unchanged next month as well for the ninth consecutive month. However, hopes are still alive for a rate cut towards the end of the year. "We are not ruling out a stance change in October 2024 and a 25 bps rate cut each in December 2024 and February 2025, followed by an extended pause, if the food inflation outlook turns decidedly favourable on the back of a normal magnitude and favourable distribution of rainfall in the rest of the monsoon season, and there are no other shocks, either global or domestic," said Aditi Nayar, Chief Economist at ICRA. (With inputs from ANI and PTI) <div type="Article" hostid="261" msid="110784179" title="Monetary Policy Committee keeps repo rate unchanged at 6.5%, confirms RBI governor Shaktikanta Das" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div> <div type="Article" hostid="261" msid="110788776" title="RBI retains inflation projection for FY25 at 4.5%" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div>

Inflation spikes in June 2024 due to high food prices; Likely to affect RBI’s decision on interest rate

<ul><li><keyword id="10926" type="General" weightage="20" keywordseo="reliance" source="Orion">Reliance</keyword> has pledged substantial <keyword id="6362476" type="General" weightage="20" keywordseo="investments" source="Orion">investments</keyword> amounting to ₹20,000 crores across strategic sectors in <keyword id="6357783" type="General" weightage="20" keywordseo="west-bengal" source="Orion">West Bengal</keyword>. </li><li>A 11.5% GDP growth rate, a substantial surge in tax revenues, and a phenomenal rise in IT exports, has served as testament to Bengal's ascent as an economic powerhouse. </li><li>Ambani exuded confidence in Bengal's potential to outpace the growth rates of established Asian economies. </li></ul>In an address delivered at the Bengal Global Business Summit, <keyword id="3820" type="General" weightage="20" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword>, chairman and managing director, Reliance industries, paid tribute to Bengal's growth potential and said. He acknowledges Bengal's rich historical legacy and the natural beauty that envelops the region, affectionately labelling it as "Shonar Bangla" or "Golden Bengal." The conglomerate head pledged substantial investments amounting to ₹20,000 crores across strategic sectors in the state, with a keen focus on digital solutions, retail expansion, and pioneering bio-energy initiatives. Ambani detailed plans for the deployment of high-speed internet (5G) and smart home solutions, poised to revolutionise rural Bengal, catalyse employment generation, and drive technological advancements. Reliance Industries has invested close to ₹45,000 crore in the last few years in the state, Ambani said. Throughout his address, Ambani spoke about Bengal's remarkable strides over recent years. He poetically likened chief Minister Mamata Banerjee to an "Agni Kanya," symbolising resilience and strength, acknowledging her pivotal role in propelling Bengal's trajectory towards growth and prosperity. Notable indicators, including the 11.5% GDP growth rate, which is much higher than the national average, a substantial surge in tax revenues, and a phenomenal rise in IT exports, has served as testament to Bengal's ascent as an economic powerhouse. Ambani recognised Bengal's burgeoning status as the <keyword id="1094135" type="General" weightage="20" keywordseo="logistics-hub" source="Orion">logistics hub</keyword> in the East, owing to its conducive business environment and promising avenues for growth. He lauded Bengal's heritage of intellectuals and the contemporary surge in entrepreneurial spirit witnessed at the summit, marking a significant shift in the state's economic landscape towards innovation and enterprise. The Reliance chairman portrayed a vivid and promising portrait of Bengal's future, envisioning it as a trillion-dollar economy and a pivotal gateway for India into Southeast and Far-East Asia. He depressed confidence in Bengal's potential to outpace the growth rates of established Asian economies, envisioning a future of prosperity and vitality. The speech also shed light on Reliance Foundation's philanthropic endeavours, outlining ambitious projects such as the restoration of the historic Kalighat Temple and the patronage extended to Bengal's artisans and weavers. Ambani extended an earnest invitation to potential investors, portraying Bengal as an optimal investment destination teeming with untapped potential and promising opportunities for economic prosperity and growth. Ambani conveyed heartfelt admiration for Bengal's rich cultural heritage and the abundance of talent within the state. He reiterated his commitment to fostering ample employment opportunities and ardently advocated for Bengal as a prime investment destination, extending a warm invitation to all stakeholders to take part in Bengal's promising journey towards progress and development.

Mukesh Ambani invokes ‘Shonar Bangla’ as he expects state to be the logistics hub of the East

New Delhi [<keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>], March 1 (ANI): In a research report titled "When 8 per cent becomes the new normal: Decoding the new normals of a GDP on swing," the State Bank of India's Economic Research Department unveils key insights into India's economic landscape, shedding light on the recent GDP surge and providing projections for the future. The report highlights the unprecedented growth witnessed in India's economy during the third quarter of FY24, defying all estimates and expectations. India's GDP expanded by a remarkable 8.4 per cent during this period, following consecutive quarters of over 8 per cent growth. This surge has been attributed to effective policy frameworks and perspectives, which have surpassed irrational market expectations. The buoyancy in indirect tax collection, marked by a 32 per cent year-on-year growth amounting to Rs 3.9 lakh crore, further underlines the robustness of the economy. As a result, projections for FY24 indicate a GDP growth of 7.6 per cent and Gross Value Added (GVA) growth of 6.9 per cent. The report suggests that the GDP growth for the fourth quarter could be around 5.9 per cent, indicating a potential attainment of 8 per cent growth for the fiscal year. Significant revisions in both annual and quarterly numbers have led to upward adjustments in the GDP figures for FY22 and FY24. This revision has propelled the Year-to-Date (YTD) GDP growth rate above the 8 per cent mark. However, downward revisions in FY23 GDP numbers have implications for the fiscal deficit, necessitating an upward revision to 5.9 per cent of GDP for FY24. Delving into sectoral performances, the report highlights stellar performances in <keyword id="20788019" type="General" weightage="20" keywordseo="manufacturing-and-services" source="keywords">Manufacturing and Services</keyword>, buoyed by significant growth in industry, manufacturing, and construction sectors. However, the agriculture sector witnessed a decline of -0.8 per cent in Q3, attributed to uncontrollable factors. Moreover, the report underscores remarkable milestones achieved in terms of per capita GDP, with current prices crossing the Rs 2 lakh mark in FY24. Decadal Compound Annual Growth Rate (CAGR) stands at 8.9 per cent, with notable increases observed even in constant prices. Notably, post-pandemic recovery has seen a substantial jump in per capita GDP. The report also analyzes investment and savings trends over the past decade, revealing an increase in Gross Capital Formation (GCF) and gross savings. <keyword id="19964112" type="General" weightage="20" keywordseo="noteworthy" source="keywords">Noteworthy</keyword> is the improvement in the <keyword id="20788020" type="General" weightage="20" keywordseo="incremental-capital-output" source="keywords">Incremental Capital Output</keyword> ratio (ICOR), indicating increasing efficiency of capital utilization and laying the groundwork for sustained economic growth. In conclusion, the findings of the SBI report suggest a promising outlook for India's economy, with the potential for sustained growth at 8 per cent in FY25. (ANI)

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