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Strong growth and a narrower <keyword id="19942084" type="General" weightage="20" keywordseo="fiscal-deficit" source="keywords">fiscal deficit</keyword> can lead to a <keyword id="20424939" type="General" weightage="20" keywordseo="sovereign-rating" source="keywords">sovereign rating</keyword> upgrade for <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>, a German brokerage said on Monday. The government's commitments on fiscal deficit to 5.1 per cent in FY25 and further down to 4.5 per cent in FY26 "look more credible now", analysts at <keyword id="19960549" type="General" weightage="20" keywordseo="Deutsche-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="Deutsche Bank" meta.hostid="261" meta.entityid="Deutsche Bank">Deutsche Bank</keyword> said, pointing out that the number came in at 5.6 per cent in FY24 as against the budgeted 5.8 per cent. Courtesy the higher than expected dividend announcement by 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> (RBI) at Rs 2.1 lakh crore, the fiscal deficit for FY25 can come down to 5 per cent as against the budgeted 5.1 per cent. On growth, the note said it expects real GDP expansion to come at 6.9 per cent in FY25 and go down further to 6.5 per cent in FY26. "Strong growth, lower fiscal deficit opens up room for ratings upgrade," the note said. "A faster-than-anticipated pace of fiscal consolidation could pave the way for a sooner-rather-than-later sovereign rating upgrade for India," the analysts said. It can be noted that global rating agency <keyword id="20043943" type="General" weightage="20" keywordseo="SP" source="keywords" meta.keywordsubtype="org" meta.entityname="S&amp;P" meta.hostid="261" meta.entityid="S&amp;P">S&amp;P</keyword> had last week revised up the outlook on its sovereign rating for India to "positive" from "stable" earlier. On Friday, official data suggested that the economy grew at a faster clip of 8.2 per cent in the March quarter, which takes the FY24 real <keyword id="19972825" type="General" weightage="100" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> to 7.6 per cent. The note said the Indian economy has exhibited "remarkable resilience" despite higher rates for longer, the Russia-Ukraine war and Covid prior to that, though a strong pickup in real GDP growth during FY24 can be also attributed materially to a very low <keyword id="21922336" type="General" weightage="20" keywordseo="GDP-deflator" source="keywords">GDP deflator</keyword>. It explained that nominal GDP growth slowed to 9.6 per cent in FY24, from 14.2 per cent in FY23 and 19 per cent in FY22. But in real terms, GDP growth accelerated to 8.2 per cent in FY24 from 7 per cent in FY23, thanks to a collapse in the GDP deflator to 1.4 per cent in FY24 from 7.6 per cent year-on-year in FY23 and 9.4 per cent in FY22. Deutsche Bank also advised caution on reading the headline GDP numbers, pointing out that while the real GDP grew 8.2 per cent, real GVA (gross value added) growth was 1 percentage point lower at 7.2 per cent.

Strong growth, lower fiscal deficit may lead to India rating upgrade: Deutsche Bank

Ahead of the union <keyword id="19936553" type="General" weightage="20" keywordseo="budget" source="keywords">budget</keyword> 2024, which is set to be presented on the 22nd July, finance minister Nirmala Sitharaman kicked off pre-budget consultations on 19th June. In their pre-budget memorandum to the <keyword id="19900485" type="General" weightage="20" keywordseo="finance-ministry" source="keywords" meta.keywordsubtype="org" meta.entityname="finance ministry" meta.hostid="261" meta.entityid="finance ministry">finance ministry</keyword>, the <keyword id="20366533" type="General" weightage="20" keywordseo="PHD-Chamber-of-Commerce-and-Industry" source="keywords" meta.keywordsubtype="org" meta.entityname="PHD Chamber of Commerce and Industry" meta.hostid="261" meta.entityid="PHD Chamber of Commerce and Industry">PHD Chamber of Commerce and Industry</keyword> proposed 10 reforms it deemed essential for <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>’s journey towards <keyword id="19916816" type="General" weightage="20" keywordseo="Viksit-Bharat" source="keywords" meta.keywordsubtype="org" meta.entityname="Viksit Bharat" meta.hostid="261" meta.entityid="Viksit Bharat">Viksit Bharat</keyword>. Amongst the proposals submitted were introducing reforms to enhance the share of the manufacturing sector in India’s <keyword id="19904293" type="General" weightage="20" keywordseo="GDP" source="keywords">GDP</keyword> to 25% by 2030, and the expansion of the <keyword id="19981334" type="General" weightage="20" keywordseo="PLI-scheme" source="keywords">PLI scheme</keyword> beyond its existing scope of 14 sectors. In addition to this, <keyword id="20366532" type="General" weightage="100" keywordseo="PHDCCI" source="keywords" meta.keywordsubtype="org" meta.entityname="PHDCCI" meta.hostid="261" meta.entityid="PHDCCI">PHDCCI</keyword> also emphasised on rationalising direct taxes for the middle class, infrastructure enhancement and smart village development, with special focus on tier-2 and 3 cities. As per Sanjeev Agrawal, President, PHDCCI, “In order to strengthen the share of the manufacturing sector in the country's GDP, we recommend the status quo on the corporate tax rate at 22% for existing companies and 15% for new manufacturing companies incorporated after October 1, 2019. The middle class must be spared from the 30% tax rate and this rate must be applicable only to those with taxable income above Rs. 40 lakh, this will support consumption demand in this country”. In addition to this, PHDCCI also emphasised on strengthening linkages between universities and industries for bettering research and development activities in the country, and also appealed for reducing cost of doing business. Here’s a snapshot of some prominent demands placed forth by the PHDCCI ahead of the budget : <ol><li>Change in NPA classification limit from the present 90 days to 180 days</li><li>Fostering AI education, skill development and competitiveness in the service sector</li><li>Increase agricultural exports to US$100 billion in the next 3 years via increased public investments in infrastructure,</li><li>Ensure the presence of schools within a radius of 1 km, colleges within a 10 km radius and universities within a 25 km radius in the next five years.</li><li>Make health centres available within the radius of 1 km and hospitals within the radius of 10 km.</li><li>Propose a Voluntary Disclosure Scheme (VDS) for legal cases older than 10 years, offering settlement opportunities at a nominal 15% penalty. </li></ol>

Bolster manufacturing sector, consumption this budget: PHDCCI to FinMin

Finance Minister Nirmala Sitharaman will be presenting her fifth Budget that may do a tightrope walk between staying fiscally prudent and meeting general public expectations of lower taxes and a wider social security net, while at the same time firing the engines of the economy. Sitharaman had in her first Budget in 2019 replaced leather briefcase -- which had been in used for decades for carrying Budget documents -- with a traditional 'bahi-khata' wrapped in red cloth. Budget 2023-24 would be in paperless form, as done in the last two years, and would be available on the 'Union Budget Mobile App' for hassle-free access by Members of Parliament (MPs) and the general public. Here are the key numbers to watch for in Budget 2023-24, which is widely expected to boost spending towards policies that create jobs, leave more money in hands of the common man and boost manufacturing, while increasing tax revenues. * <keyword id="6365485" type="General" weightage="20" keywordseo="Fiscal-Deficit" source="Orion">Fiscal Deficit</keyword>: The budgeted fiscal deficit, which is the difference between the government expenditure and income, for the current fiscal ending March 2023 is 6.4 per cent, against 6.71 per cent in the last fiscal. The number for 2023-24 would be in focus as it is widely expected that the government would open its purse strings in an election year. * Disinvestment/Privatisation: In current fiscal year the budgeted disinvestment target is likely to be missed, like the past four years. It is expected the government would set a realistic target for next fiscal. * <keyword id="112324" type="General" weightage="20" keywordseo="Capital-Expenditure" source="Orion">Capital Expenditure</keyword>: The government's planned capital expenditure for this fiscal year is budgeted at Rs 7.5 lakh crore, higher than Rs 5.5 lakh crore in the last fiscal. The government has been pushing infrastructure creation and also incentivising states to step up capex. * Tax Revenue: The Budget had pegged direct and indirect tax mop-up at Rs 14.20 lakh crore and Rs 13.30 lakh crore for current fiscal, taking the total figure to Rs 27.50 lakh crore. The government's tax revenues are expected to overshoot the budget estimates by about Rs 4 lakh crore on buoyant income tax and customs duty. * <keyword id="6370254" type="General" weightage="20" keywordseo="Borrowing" source="Orion">Borrowing</keyword>: The government's gross borrowing budget was at Rs 14.31 lakh crore in current financial year ending March 31. The government borrows from the market to fund its fiscal deficit and with tax revenues seeing an uptick, the government has cut its gross borrowings by Rs 10,000 crore to Rs 14.21 lakh crore. The borrowing number would be watched by the market, especially on the back of expected higher capital expenditures to boost growth. * <keyword id="3236955" type="General" weightage="20" keywordseo="Nominal-GDP" source="Orion">Nominal GDP</keyword>: India's nominal GDP growth (real GDP plus inflation) in the current fiscal is estimated to be 15.4 per cent. The numbers for next fiscal would be lower as the inflation has come down. The Budget is expected to give an outline on the nominal GDP growth numbers. Real GDP growth in current fiscal is projected at 7 per cent and come down to 6-6.5 per cent in the next. * Spotlight would also be on spending on key schemes, like NREGA, as well as key sectors like health and education.

Budget for world's fastest growing economy: Key numbers to be watched

New Delhi, India's economy grew 7.6 per cent in the September quarter of this fiscal and remained the fastest-growing large economy, mainly due to better performance by manufacturing, mining and services sectors, the government data showed on Thursday. The gross domestic product (GDP) expanded by 6.2 per cent in the July-September quarter of 2022-23. India remained the fastest-growing major economy, as China posted a 4.9 per cent growth in July-September 2023. According to the National Statistical Office (NSO) data, the agriculture sector GVA (Gross Value Added) growth decelerated to 1.2 per cent in the September 2023 quarter from 2.5 per cent a year ago. The expansion in financial, real estate and professional services' GVA was 6 per cent, down from 7.1 per cent in the year-ago quarter. The GVA in the manufacturing sector showed a growth of 13.9 per cent in the second quarter of the current fiscal compared to a contraction of 3.8 per cent in the year-ago period. As per the data, the output (GVA) in the 'mining and quarrying' accelerated to 10 per cent in the second quarter against a contraction of 0.1 per cent a year ago. Electricity, gas, water supply and other utility services' grew by 10.1 per cent from 6.1 per cent. The construction sector recorded a growth of 13.3 per cent year-on-year in the second quarter compared to 5.7 per cent. The growth in gross domestic product (GDP) during the April-June quarter of 2023-24 remained unchanged at 7.8 per cent. "Real GDP or GDP at Constant (2011-12) Prices in Q2 2023-24 is estimated to attain a level of Rs 41.74 lakh crore, as against Rs 38.78 lakh crore in Q2 2022-23, showing a growth of 7.6 per cent as compared to 6.2 per cent in Q2 2022-23," the NSO said in a statement. Nominal GDP or GDP at current prices in Q2 2023-24 is estimated at Rs 71.66 lakh crore against Rs 65.67 lakh crore in Q2 2022-23, showing a growth of 9.1 per cent as compared to 17.2 per cent in Q2 2022-23, it added. It further said the GDP at constant (2011-12) prices in April-September 2023-24 (H1 2023-24) is estimated at Rs 82.11 lakh crore against Rs 76.22 lakh crore during the corresponding period of the previous year, showing a growth of 7.7 per cent in H1 2023-24 compared to 9.5 per cent in H1 2022-23, it said. GDP at current prices in H1 2023-24 is estimated at Rs 142.33 lakh crore compared to Rs 131.09 lakh crore during the corresponding period of the previous year, showing a growth of 8.6 per cent in H1 2023-24 against 22.2 per cent in H1 2022-23. Meanwhile, the output of eight key infrastructure sectors jumped 12.1 per cent in October 2023 against 0.7 per cent expansion in the year-ago period on account of a sharp uptick in production of coal, steel, cement and electricity, according to the official data. The government's fiscal deficit at the end of October touched 45 per cent of the full-year budget estimate, according to data released by the Controller General of Accounts (CGA) on Thursday.

India's GDP grows 7.6% in September quarter, beats RBI estimates

<ul><li>This year will likely be remembered for marking its emergence as the world's most populous nation.</li><li>By 2050, the UN expects <keyword id="3658" type="General" weightage="100" keywordseo="india" source="Orion">India</keyword> will have 1.6 billion residents and China 1.3 billion.</li><li>A growing working-age population is an important source of economic growth, so India's emergence will give it new power in international politics.</li></ul> If any major middle-income country is truly outperforming in the coming decades, it's the world's soon-to-be third largest economy (and its largest democracy), India, Eurasia Group said in a report. "In my view, 2023 will be remembered for India's emergence as the third pole of the world," wrote <keyword id="15992875" type="General" weightage="50" keywordseo="shigesaburo-okumura" source="Orion">Shigesaburo Okumura</keyword>, Editor-in-Chief of Nikkei Asia, in a recent article. Another important factor not to be neglected is India. This year will likely be remembered for marking its emergence as the world's most populous nation, Okumara wrote. According to the UN, China's population last year was 1.426 billion while India's was 1.417 billion. In July, the UN forecast that China's population would fall in 2023 while India's would surpass it. By 2050, the UN expects India will have 1.6 billion residents and China 1.3 billion. A growing working-age population is an important source of economic growth, so India's emergence will give it new power in international politics, Okumara said. Moreover, decoupling between the US and China and the rebuilding of technology supply chains to exclude China benefits India. <keyword id="6354427" type="General" weightage="50" keywordseo="apple" source="Orion">Apple</keyword> is building iPhone 14s in India. <keyword id="292865" type="General" weightage="50" keywordseo="natarajan-chandrasekaran" source="Orion">Natarajan Chandrasekaran</keyword>, chairman of <keyword id="46894" type="General" weightage="50" keywordseo="tata-sons" source="Orion">Tata Sons</keyword>, has talked of plans to produce semiconductors in the subcontinent. In March, India will host the plenary session of the <keyword id="833063" type="General" weightage="50" keywordseo="trilateral-commission" source="Orion">Trilateral Commission</keyword> for the first time. This year, it is also chairing the Group of 20, a role that will involve a leaders' summit and many ministerial meetings. The Modi government will be eager to show leadership ahead of India's own elections in 2024, Okumara wrote. "The new year thus could mark the beginning of a tripolar world, involving the US, China and India. New Delhi is undeniably on the rise," Okumara concluded. <keyword id="47256" type="General" weightage="50" keywordseo="challenges" source="Orion">Challenges</keyword>, however, are mounting for India's economy with the GDP forecast at a half-century low. Motilal Oswal Financial Services forecast in a note that after growing strongly for two consecutive years, India's real GDP growth would decelerate to 5.2 per cent YoY in FY24, while nominal GDP growth would weaken even sharply to 7-7.5 per cent, led by easing inflation. A combination of factors such as slower global economy, fading pent-up demand and normalising base effects would contribute to slower real growth. With an expected retail inflation print at just 4.3 per cent and a mere 1 per cent growth in the wholesale price index (<keyword id="46000" type="General" weightage="50" keywordseo="wpi" source="Orion">WPI</keyword>) in FY24, the GDP deflator could be around 2 per cent, dragging down India's nominal GDP growth to the lowest level compared to any year between the early 1970s and FY19 (that is, half-a-century pre-Covid period), the report said. Such slow growth rate would have some serious implications for the macro economy and financial markets. "Overall, we believe that unlike the past 12-15 months, the narrative will reverse in FY24. Inflation concerns will take a back seat and growth worries will resurface. This may be true not only for India, but also for the entire global economy. At the same time, restrictive monetary policy will fail to boost financial markets. Accordingly, CY23 could be very painful," the report said. Revenue of listed companies is highly correlated with nominal GDP growth (and WPI-inflation). In case of single-digit nominal GDP growth, corporate sales growth is also expected to weaken from an average of &gt;30 per cent YoY in the past seven quarters to single digits in FY24. With an expectation of weaker nominal GDP growth in FY24, we estimate India's debt growth to also weaken. Thus, bank credit growth could also moderate from 15-16 per cent in FY23 to 12 per cent in FY24 with a downward bias, the report said. As central banks across the world simultaneously hike interest rates in response to inflation, the world may be edging toward a global recession in 2023 and a string of financial crises in emerging market and developing economies that would do them lasting harm, according to a comprehensive new study by the <keyword id="6354424" type="General" weightage="50" keywordseo="world-bank" source="Orion">World Bank</keyword> in September. Several historical indicators of global recessions are already flashing warnings. The global economy is now in its steepest slowdown following a post-recession recovery since 1970. Global consumer confidence has already suffered a much sharper decline than in the run-up to previous global recessions. The world's three largest economies -- United States, China, and the Euro zone -- have been slowing sharply. The experience of the 1970s, the policy responses to the 1975 global recession, the subsequent period of stagflation, and the global recession of 1982 illustrate the risk of allowing inflation to remain elevated for long while growth is weak. The 1982 global recession coincided with the second-lowest growth rate in developing economies over the past five decades, second only to 2020. It triggered more than 40 debt crises and was followed by a decade of lost growth in many developing economies, the World Bank said. India's current account deficit expectedly swelled to a 37-quarter high of $36.4 billion (4.4 per cent of GDP) in Q2 FY23 from $18.2 billion in Q1 FY23 (2.2 per cent of GDP). The resulting net balance of payments (BoP) position registered a deficit of $30.4 billion (3.7 per cent of GDP), its weakest since the 2008 global financial crisis, compared to a surplus of $4.6 billion in Q1 FY23, Acuite Ratings said. Amid an uncertain geopolitical environment and slowing global growth, however, risks will remain on both current account balance and capital flows, it said. With excessive demand supply disparities, bloated supply chain management and battle against inflation weighing down on global economic growth, the New Year started on a gloomy outlook as IMF predicts global GDP growth topping at 2.7 per cent, narrowly escaping recession, Nuvama Professional Clients Group said in a note. The economy has been supported by sturdy domestic demand as indicated in GST collections and consumer spending. However, the industrial output contracted by 4 per cent YoY in October, the worst in over two years, hobbled by the drop in orders from western markets and weak investment at home, the note said. Standard Chartered said in a report that 2023 global macroeconomic backdrop is likely to be challenging given the heightened risk of a slowdown as lagged effects of monetary policy tightening leads to a weaker demand scenario and lower corporate earnings performance. As the monetary policy rate cycle peaks amid receding inflationary pressures in the second half of the year, risk sentiment could improve with the growth outlook stabilising. "In our assessment," the bank noted, "India's growth-inflation dynamics is stable and better than its peers." The post-pandemic economic recovery cycle remains strong amid supportive government policies and a pick-up in investments. Further, the likely broadening of the rural economy's recovery and of the service sectors is a strong tailwind, the note said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/indias-startup-economy-stares-at-deepening-funding-winter-in-2023/articleshow/96807902.cms">India's startup economy stares at deepening funding winter in 2023</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/thelife/personalities/news/ar-rahman-unknown-facts-about-about-indian-composer-and-oscar-winner/articleshow/96793884.cms">AR Rahman can leave dinner midway if inspiration strikes &amp; other anecdotes about the reticent music maestro</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/health/news/india-mulls-2nd-covid-booster-even-as-coverage-of-first-dose-remains-feeble/articleshow/96792098.cms">India mulls 2nd Covid booster even as coverage of first dose remains feeble</a>

India could emerge as the third pole despite GDP growth worries say experts

New Delhi, Feb 1 () Finance Minister Nirmala Sitharaman on Saturday said nominal GDP growth for 2020-21 is estimated at 10 per cent.
 Presenting the Budget for 2020-21, Sitharaman said receipts for 2020-21 are pegged at Rs 22.46 lakh crore while expenditure at Rs 30.42 lakh crore.
 The revised estimated expenditure for FY20 has been pegged at Rs 26.99 lakh crore and receipts at Rs 19.32 lakh crore, she said.
 The net market borrowings would be at Rs 4.99 lakh crore in FY 2019-20 and are estimated at Rs 5.36 lakh crore in the next fiscal.
 She however, said the government expected tax buoyancy to take time and the recent cut in corporate tax to cause loss of substantial revenue in short run, economy to reap huge returns in due course. 
 Sitharaman said income tax rates will be significantly reduced for those who forego reliefs, exemptions.
 To address liquidity constraints of NBFCs and housing finance corporations, partial credit guarantee scheme will be launched by government, Sitharaman added.
 The finance minister said amendments will be made to enable NBFCs to extend invoice financing to MSMEs.
 Sitharaman said the government has accepted recommendations of interim report of 15th Finance Commission and the final report will be submitted later.
 All flagship schemes of the government are provided for in Budget, the finance minister said.
 The government will sell part of its holding in LIC, she said adding an international bullion exchange will be set up in IFSC GIFT City. TEAM MBI RKL ANZ RKL MR
MR

Nominal GDP growth for FY21 estimated at 10%: Sitharaman

New Delhi, Feb 4 () Moody's Investors Service on Tuesday said economic growth projections made by Finance Minister Nirmala Sitharaman in her Budget for 2020-21 appear ambitious given the structural and cyclical challenges facing the Indian economy.
The Budget expects nominal GDP growth of 10 per cent in the next fiscal , followed by 12.6 per cent and 12.8 per cent in FY22 and FY23, respectively.
"These forecasts appear ambitious given the combination of structural and cyclical challenges that the Indian economy faces," it said.
Even before the significant slowing in economic expansion in 2019, nominal GDP growth had averaged about 11 per cent over the five years from 2014 to 2018.
"We expect the economy to rebound at a more modest pace, with nominal GDP growth rising to around 8.7 per cent in fiscal 2020 and 10.5 per cent in fiscal 2021, from about 7.5 per cent in fiscal 2019," it said. ANZ ANZ BAL
BAL

Nominal GDP growth projections ambitious given structural challenges:Moody's

<ul><li>Before accounting for inflation, the slowdown in the pace of India’s economic growth would seem nearly seven times worse than it does right now</li><li>The corporate profit-to-GDP ratio for Nifty 500 companies dropped to a 15-year low of 2.8% in FY18, the Ambit report said. </li><li>Recent rate cuts and tax cuts may boost growth but the government will have to push through meaningful strategic disinvestment to fund the stimulus.</li></ul>India’s economic slowdown is real. A new research from Ambit shows that the country’s nominal GDP (Gross Domestic Product) growth ⁠— the pace of growth before deducting inflation ⁠— has seen the sharpest fall in twenty years. “Nominal GDP growth has fallen by 870 basis points, compared to Real GDP growth that is down 125 basis points,” Ambit’s November 2019 report said. This essentially means that before accounting for inflation, the slowdown in the pace of India’s economic growth would seem nearly seven times worse than it does right now. <keyword id="7706673" type="UNKNOWN" weightage="20" keywordseo="finance-minister-nirmala-sitharaman">Finance Minister Nirmala Sitharaman</keyword> has already ruled out a ‘quick recovery’ from the current slump. Hope floats that the emergency measures taken by the government as well as the <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> will turn the tide. 
 
 
 
 
 
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 The missteps and the correction At the end of 2018, India had one of the highest lending rates in the world. If the real interest rate⁠— the rate of interest on loans minus the inflation rate ⁠— is too high, it may act as a disincentive for investors who look to raise money from the market or banks to set up or grow their business. The corporate profit-to-GDP ratio for Nifty 500 companies dropped to a 15-year low of 2.8% in FY18. the Ambit report said. 
 
 
 
 
 
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 The RBI’s push to bring lending rates down may set off investors who were sitting on the fence due to high cost of funds. Under Governor Shaktikanta Das, the RBI has cut the benchmark interest rates by 135 basis points this year alone. But much of it is yet to trickle down to the borrowing counters. The recently announced tax cuts have the potential trigger investments and kickstart a virtuous cycle of growth, employment and consumption. But the fund these stimulus measures, the government needs money and that will come only from strategic divestment. The budget has a goal of ₹ 1 trillion but so far, in recent years, stake sale by the government has been merely financial⁠— money has moved from one pocket of the government to another. SEE ALSO: <a href="http://businessinsider.in/policy/economy/news/raghuram-rajan-gave-ideas-on-how-to-revive-economic-growth-in-india/articleshow/71573594.cms" data-type="tilCustomLink" target="_blank">Raghuram Rajan’s recipe to revive India's economic growth</a> <a href="https://www.businessinsider.in/narendra-modi-pmeac-comments-on-indias-economic-slowdown/articleshow/70954078.cms" data-type="tilCustomLink" target="_blank">Here’s what Narendra Modi’s closest advisors have been saying about economic slowdown</a>

India's nominal GDP growth has seen the sharpest fall in 20 years

<ul class="summary-list"><li>Gross domestic product is the total value of goods and services produced in a country over a period of time.</li><li>There are various ways to calculate <keyword id="11921644" type="UNKNOWN" weightage="60" keywordseo="gdp" source="Orion">GDP</keyword> and different types of GDP that look at different factors.</li><li>GDP is used to track economic expansion or contraction but lacks some important nuance.</li></ul>Gross domestic product (GDP) is a measurement of the total value of goods and services produced in a country during a set period of time. The amount that GDP increases or decreases periodically is an important metric that investors use to assess the health of the <keyword id="11893570" type="UNKNOWN" weightage="60" keywordseo="economy" source="Orion">economy</keyword> and particular industries.GDP is also a key consideration in the government's tax-and-spending plans and the Federal Reserve's monetary policies. Read on to learn how GDP works, how it's calculated, and the limitations of using GDP as a measurement for economic health.<h2>Understanding how GDP works </h2>GDP is used to monitor both the size and strength of an economy and is usually discussed in terms of the percentage of its growth or contraction over time. For example, the US Bureau of Economic Analysis (BEA) <a href="https://www.bea.gov/news/2021/gross-domestic-product-3rd-quarter-2021-second-estimate-corporate-profits-3rd-quarter" target="_blank" rel="noopener">reported</a> that real GDP increased at an annual rate of 2.1% in the third quarter of 2021. GDP for the US is measured in quarterly and annual intervals."It's typically used as a method of measuring a country's economic strength when compared to others," explains Jim Pendergast, senior vice president of <a href="https://altline.sobanco.com/" target="_blank" rel="noopener">altLINE</a>, a division of The Southern Bank Company.The size and scope of the more than $22 trillion US economy makes calculating GDP a complex task. Finding the total dollar value of the goods and services produced in a year involves collecting data in four main categories: consumer spending, government spending, business spending (or investment), and net exports.The <a href="https://www.bea.gov/system/files/2020-04/GDP-Education-by-BEA.pdf" target="_blank" rel="noopener">BEA</a> describes each of the main categories like this:<ul><li>Consumer spending: The goods and services you buy, such as groceries, clothes, cellphone service and health care</li><li>Business spending: Money spent on everything from land, buildings, and equipment to unsold inventory; also includes consumer home purchases</li></ul><ul><li>Government spending: The money spent on goods and services including schools, roads, and national defense</li></ul><ul><li>Net exports: The value of exports to other countries minus the value of imports into the US</li></ul><a href="https://www.imf.org/external/pubs/ft/fandd/basics/gdp.htm" target="_blank" rel="noopener">The International Monetary Fund (IMF)</a> notes that while GDP is valuable because it gives information about the size and performance of an economy, it's also important to understand what GDP does not show. This includes the overall standard of living or well-being of countries where increased output may come at the cost of damage to the environment or the reduction of leisure time. On the surface, evaluating GDP numbers shows that the economy is either expanding or contracting. It doesn't track everything, though.Some of the things not included in GDP are unpaid domestic labor such as childcare, activities that occur on the black market, the sale of used items, the sale of items not produced in the US, stock transactions, unemployment or Social Security payments, and volunteering. GDP is used by various entities in different ways. Federal and local government officials use it as part of the budgeting process. It's a key metric informing the Fed's decision making on monetary policy. Businesses use it when making strategic decisions about expansion. Investors can use GDP to assess the pulse of the economy and certain industries as well as review international markets. "It helps investors know which countries are most profitable. If a country is struggling financially, investors could lose a lot of money in the market," says Pendergast. "For example, when Greece experienced its significant economic downturn, many foreign investors lost money on the market. By analyzing trends in the GDP, investors can know where to put their money."<h2>How is GDP calculated? </h2>According to the <a href="https://www.bea.gov/system/files/2020-04/GDP-Education-by-BEA.pdf" target="_blank" rel="noopener">BEA</a>, GDP is calculated as the sum of the four main categories: Consumer spending + business spending + government spending + net exports = GDPAdding these together, you get GDP, which reflects the overall market value of all goods and services that are produced. This GDP calculation is typically referred to as the expenditure approach, but there are two other ways to calculate GDP as well. According to the <a href="https://www.imf.org/external/pubs/ft/fandd/basics/gdp.htm" target="_blank" rel="noopener">IMF</a>, the income approach takes the total sum of all the incomes that are created by production. Additionally, there is the production approach, which calculates any added value from the production process. This can include things such as food ingredients creating a meal, or designers' services included in a project that comes to life later on. The BEA releases <a href="https://www.bea.gov/news/2021/gross-domestic-product-3rd-quarter-2021-advance-estimate" target="_blank" rel="noopener">GDP estimates and reports</a> that you can review yourself. You can also turn to the IMFto see global GDP data in its <a href="https://www.imf.org/en/Data" target="_blank" rel="noopener">World Economic Outlook or Global Financial Stability Reports</a>.Quick tip: As an investor, you can review <a href="https://www.bea.gov/data/gdp/gdp-industry" target="_blank" rel="noopener">GDP data by industry</a> to help you evaluate growth and inform your financial decision-making. <h2>What are the types of GDP? </h2>There are also various types of GDP that are measured in different ways, each serving a different purpose. "Nominal GDP is an evaluation of a country's economic production, excluding inflation and the cost of rising prices within the country," says Pendergast. Sometimes this can also be called "current-dollar GDP". Since nominal GDP doesn't account for inflation, you need to look at <a href="https://www.businessinsider.com/what-is-real-gdp" target="_blank" rel="noopener">real GDP</a> numbers which are adjusted for inflation over time to provide a more accurate picture. "Real GDP is the inflation-adjusted GDP with information of years past in terms of monetary value over time," explains Pendergast. There are other important GDP-based metrics that offer more insights and nuance. "GDP per capita measures the average assets of everyone within a country's population, which can include productivity and living standards," Pendergast notes. "GDP growth rate primarily focuses on the average change in economic growth over time based on new policies, inflation, and unemployment rates."There's also a way to compare GDP among countries. Each country reports GDP data in its own currency, so to evaluate GDP among different countries, a purchasing power parity (PPP) exchange rate is used to convert GDP into US dollars.The PPP exchange rate reflects the rate that a particular country would need to convert its GDP currency to another country and hold the same 'purchasing power' to buy an equal amount of goods and services. <h2>Limitations of GDP </h2>GDP is used as a go-to economic benchmark on a global level. While it can provide markers for economic growth, it doesn't show you the big picture for everything and lacks some important nuance. "For the most part, GDP can give an accurate account of areas of improvement and decline, both of which are essential to rebuilding a population's economy," says Pendergast.But it falls short in other aspects because evaluating output is just one way to look at the productivity of a particular country or economy. "GDP gives a poor evaluation of quality of life. Since a GDP report is broad, it's difficult to analyze how people are thriving within the country," explains Pendergast. "Different standards of living and unemployment in a variety of cities are extremely different, and such a broad view doesn't improve a country's ability to make small changes to fix big problems."<h2>The financial takeaway</h2>GDP is an economic metric that is used in a wide variety of contexts and has uses that are far-reaching on a national and global level. It's a good benchmark to use as an investor to assess the health of the economy and certain industries. What it doesn't do is take into account unpaid labor, quality of life, or happiness.To do your own research on GDP, you can check out <a href="https://www.bea.gov/news/2021/gross-domestic-product-3rd-quarter-2021-advance-estimate" target="_blank" rel="noopener">reports published by BEA </a>and <a href="https://www.imf.org/en/Data" target="_blank" rel="noopener">look at data from the IMF.</a>

GDP represents the sum total of a nation's output and income

<ul class="summary-list"><li>US <keyword id="6354971" type="DEFINITION" weightage="60" keywordseo="gross-domestic-product">gross domestic product</keyword> grew at an annualized rate of 6.4% in the first quarter of 2021.</li><li>The increase is the second-largest since 2003. Economists expected a quarterly gain of 6.7%.</li><li>The recovery isn't complete, but Joe Biden's ambitious spending plans could boost growth further.</li></ul>The US <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> edged closer to a full recovery in the first quarter of 2021 as vaccine distribution and stimulus reinvigorated spending across the country.The US's gross domestic product grew at an annualized rate of 6.4% through the quarter that ended in March, the Commerce Department announced Thursday. The expansion ranks as the second-strongest pace of quarterly growth since 2003, dwarfed only by a record-breaking rebound in the third quarter of 2020.The median estimate from economists surveyed by Bloomberg called for an expansion of 6.7% over the three-month period. The jump follows a 4.3% expansion in the fourth quarter of 2020.The reading represents how much the economy would've expanded had its first-quarter growth rate lasted for 12 months. <keyword id="293989" type="ORGANIZATION" weightage="60" keywordseo="US-GDP">US GDP</keyword> has now retraced roughly 96% of its pandemic-era decline. Had output expanded at an annualized rate of about 10%, the economy would've fully returned to the peak seen in the fourth quarter of 2019.Nominal <keyword id="35050" type="CITY" weightage="60" keywordseo="gdp">GDP</keyword>, which isn't adjusted for inflation, rose to $22 trillion. That level surpasses the 2019 peak of $21.7 trillion.The Commerce Department is scheduled to report two more estimates of first-quarter <keyword id="44910" type="PERSON" weightage="60" keywordseo="GDP-growth">GDP growth</keyword> in the coming months. The Thursday report includes preliminary data that can be revised in either of the coming releases.<h2>Trifecta of stimulus, vaccination, and reopening boost growth</h2>Americans have a handful of boons to thank for the pickup in economic growth. For starters, the average daily rate of vaccination climbed to 2.8 million doses from just 272,000 over the quarter, according to <a href="https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/">Bloomberg</a> data. The country ended the quarter with about 29% of Americans having received at least one dose and roughly 16% of Americans fully vaccinated.At the same time, the country emerged from its deadliest wave of virus cases yet. Daily COVID-19 case counts fell from a peak of nearly 301,000 cases in early January to about 68,000 cases at the end of March.The decline and vaccine rollouts allowed state and local governments to gradually relax some lockdown measures through the quarter. Retail sales bounced higher in January and March as Americans revived some of their pre-pandemic spending trends. Warmer weather also helped service businesses grow at a faster rate after elevated case counts and harsher restrictions halted activity.The country also benefited from the largest single-quarter influx of government support in history. The $900 billion stimulus plan <a href="https://www.businessinsider.com/trump-signs-coronavirus-relief-bill-after-calls-stimulus-checks-2020-12">enacted by President Donald Trump late last year</a> reached bank accounts in the first weeks of January, providing the first major fiscal support since the CARES Act passed in March 2020. The plan included $600 relief payments, expanded federal unemployment benefits, and food and rental assistance. Economists largely credited the aid package for driving <a href="https://www.businessinsider.com/us-retail-sales-january-beat-estimates-stimulus-economic-activity-recovery-2021-2">a strong bounce in consumer spending</a> through January.President Joe Biden's election victory paved the way for another large-scale stimulus plan. The president <a href="https://www.businessinsider.com/joe-biden-stimulus-plan-details-checks-congress-direct-payments-unemployment-2021-1">pitched a $1.9 trillion package</a> before his inauguration, arguing that it was time to "go big" and that deficit concerns could wait until the economy recovers. The proposal included $1,400 payments, another boost to unemployment insurance, and funding for vaccine distribution.Democrats passed that measure without any Republican support on March 11, and stimulus checks started hitting bank accounts just days afterward. The package, along with partial reopening and falling virus cases, helped accelerate hiring and economic activity in the final weeks of the quarter.<h2>What comes next, from infrastructure to hiring snags</h2>Despite passing the second-largest stimulus package in US history just weeks ago, Biden hasn't slowed his roll. The president <a href="https://www.businessinsider.com/biden-economic-spending-program-families-education-childcare-congress-2021-4">unveiled a $1.8 trillion spending package</a> on Wednesday that focuses on helping families. The plan includes funds for childcare, free universal pre-K, an extension to the child tax credit, and paid family and medical leave.The proposal joins a separate $2.3 trillion plan that boasts a greater emphasis on infrastructure. That measure would pay for nationwide broadband, renovation of key roads and bridges, and universal clean water. Taken together, the packages will total more than $4 trillion and <a href="https://www.businessinsider.com/is-bidens-stimulus-bigger-than-the-new-deal-fdr-2021-3">could surpass the New Deal in size and scope</a>.Compared with the March stimulus measure, Biden's follow-up spending would provide a <a href="https://www.businessinsider.com/biden-infrastructure-plan-boost-economic-growth-inflation-outlook-fed-kaplan-2021-4">moderate and longer-lasting boos</a>t to economic growth over several years, Robert Kaplan, the president of the Federal Reserve bank of Dallas, said on March 31."The nice thing and the desirable thing, for me, about infrastructure spending: it's that it's a long-term investment," he said in a Bloomberg TV interview. "It should help, in the future, create higher potential GDP growth, higher sustainable growth, better productivity."That's not to say uncertainties don't still loom large. New COVID-19 variants remain the "<a href="https://www.businessinsider.com/economic-recovery-outlook-fed-powell-social-distancing-masks-virus-strains-2021-4">main risk</a>" to bullish outlooks, Fed Chair Jerome Powell said earlier this month, adding Americans should stay vigilant "for a while longer."And though hiring has bounced back after its winter slump, some industries have run up against unexpected hurdles. Service-industry businesses have faced difficulty in filling job openings, from a Florida McDonald's <a href="https://www.businessinsider.com/mcdonalds-pays-50-for-job-interviews-highlighting-hiring-struggles-2021-4">paying candidates to interview</a> to ride-hailing drivers saying <a href="https://www.businessinsider.com/why-uber-lyft-expensive-taking-long-driver-shortage-2021-4">they'll hold out on work for better pay</a>.The unusual worker shortage is likely a result of <a href="https://www.businessinsider.com/economic-outlook-worker-shortage-temporary-labor-market-recovery-unemployment-bofa-2021-4">expanded unemployment benefits and virus fears</a> leading Americans to put off employment, Bank of America economists said last week. Home-schooling demands could have also played a part. The dynamic, while somewhat concerning, will fade by early 20222 as stimulus dries up and more Americans are vaccinated, the team added.

US GDP grew 6.4% in the first quarter as the economy began to reopen

<ul class="summary-list"><li><keyword id="6361649" type="UNKNOWN" weightage="60" keywordseo="Goldman-Sachs">Goldman Sachs</keyword> raised its <keyword id="293989" type="ORGANIZATION" weightage="60" keywordseo="US-GDP">US GDP</keyword> forecast to 6.6% on Joe <keyword id="60973" type="PERSON" weightage="60" keywordseo="Biden">Biden</keyword>'s $1.9 trillion stimulus plan.</li><li>Bank economists now project a lower US unemployment rate of 4.5%, down from 4.8%.</li><li>Biden's $1,400 stimulus checks will cause a "large spike" in disposable income, they said.</li></ul>Goldman Sachs has turned even more optimistic on the outlook for the US <keyword id="34412" type="ORGANIZATION" weightage="60" keywordseo="economy">economy</keyword> this year under President-elect Joe Biden. In a weekend note to clients, economists at the bank raised their forecast for US GDP to 6.6% in 2021 from 6.4%. Goldman now expects a lower US unemployment rate of 4.5% at the end of 2021, down from 4.8%.The projected economic expansion will be fueled by a boost in disposable incomes and government spending, the bank said, as <a href="https://www.businessinsider.com/joe-biden-stimulus-plan-details-checks-congress-direct-payments-unemployment-2021-1">Biden's $1.9 trillion stimulus plan</a> accentuates his intent to shore up the slumping US economy."We do not expect all of the elements of the $1.9 trillion proposal to pass, but we have raised our expectations for state fiscal aid, education and public health spending, unemployment insurance benefits, and several smaller items," Goldman economists wrote.Read More: <a href="https://www.businessinsider.com/stock-picks-to-buy-best-profit-growth-reopening-goldman-sachs-2021-1">GOLDMAN SACHS: Buy these 25 stocks best-positioned to juice profits in 2021 as stimulus and vaccine progress spur economic growth</a><div type="image" title="Screenshot 2021 01 18 at 08.43.05" height="830" width="1284" msid="80327557" hostid="261"></div>Biden's economic rescue package that includes a $1,400 boost to stimulus checks, on top of a <a href="https://www.businessinsider.com/personal-finance/stimulus-check-amount-second-round-2020-12">December measure of $600 per person</a>, will cause a "large spike" in disposable income in the first quarter of 2021, the bank said."We now forecast nominal disposable income will grow in 2021 by +4.5%," up from a prior estimate of 3.8%, the economists wrote.After the Democrats won control of the Senate in the first week of this year, the <a href="https://markets.businessinsider.com/news/stocks/goldman-sachs-upgrade-gdp-us-economy-democrat-win-senate-stimulus-2021-1-1029940557">bank raised its US GDP forecast to 6.4%</a> because of the prospect of more fiscal stimulus to combat the fallout from coronavirus. Goldman expects a 4.3% growth for the US economy in 2022 and 1.6% growth in 2023. Read More: <a href="https://www.businessinsider.com/stock-market-crash-bubble-warning-indicators-hartnett-bank-of-america-2021-1">Bank of America says the warning signs that stocks are hurtling into bubble territory are growing - and pinpoints 6 that could signal a bear market is beginning</a>

Goldman Sachs lifts US GDP forecast to 6.6% in 2021 on Biden's $1.9 trillion stimulus package

<ul><li>President-elect Joe Biden's $1.9 trillion rescue plan could boost nominal GDP growth to 11.4% year-over-year by the end of 2021, <keyword id="44660" type="CITY" weightage="60" keywordseo="JPMorgan">JPMorgan</keyword>'s <keyword id="112960" type="PERSON" weightage="60" keywordseo="David-Kelly">David Kelly</keyword> said.</li><li>The chief global strategist said on Tuesday that the plan could also cut the unemployment rate to below 5% by the end of this year.</li><li>JPMorgan had estimated before Biden's plan that nominal GDP was on track to rise by 6.4% year-over-year by the end of 2021.</li><li><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestmp;utm_medium=ingest">Sign up here for our daily newsletter, 10 Things Before the Opening Bell</a>.</li></ul>President-elect Joe Biden's rescue plan could have "significant impacts" on the economy in 2021 and dramatically boost GDP growth, according to JPMorgan's chief global strategist, David Kelly.The <a href="https://www.businessinsider.com/joe-biden-stimulus-plan-details-checks-congress-direct-payments-unemployment-2021-1">rescue plan Biden laid out last Thursday</a> would cost roughly $1.9 trillion and include a round of $1,400 direct payments, <a href="https://www.businessinsider.com/stimulus-plan-biden-federal-unemployment-benefits-coronavirus-relief-through-september-2021-1">$400 weekly federal unemployment benefits</a>, and funding to support school reopenings and vaccinations, among other efforts. Biden said he wanted to push the plan through Congress as quickly as possible.Using a simulation of the plan where $1.2 trillion is spent in 2021, Kelly estimated that it could boost nominal GDP growth to 11.4% year-over-year by the end of 2021. Most of that would come in the form of stronger real GDP growth. Kelly also said that the plan could cut the unemployment rate to below 5% by the end of 2021.JPMorgan had estimated before Biden's plan that nominal GDP was on track to rise by 6.4% year-over-year by the end of 2021.Read more: <a href="https://www.businessinsider.com/stock-picks-to-buy-best-profit-growth-reopening-goldman-sachs-2021-1" target="_blank" rel="noopener">GOLDMAN SACHS: Buy these 25 stocks best positioned to juice profits in 2021 as stimulus and vaccine progress spur economic growth</a>Kelly predicted some other economic effects of the plan:<ul><li>"Extended, expanded and enhanced unemployment benefits through September should significantly reduce poverty until the pandemic winds down. Importantly, however, a $400 weekly supplement, as opposed to the $600 supplement in the CARES Act, would give most laid-off workers a financial incentive to return to work when possible."</li><li>New stimulus checks of $1,400 per person would support consumption over the next few months and could lead to a spending boom in the fourth quarter of 2021 when families spend on services that are shut down right now.</li><li>Additional spending on vaccinations could hasten the end of the pandemic and stimulate the economy.</li></ul>As for the investment implications of Biden's rescue plan, Kelly said faster economic growth could boost cyclical stocks and particularly financial stocks relative to defensive stocks. But it might lead to slumping asset performance down the road."With current valuations at very high levels, 2021 already looked like a difficult year for financial assets," Kelly said. "On balance, the Biden rescue plan, if implemented, could add to those challenges."Biden also called for more spending through a "recovery plan" he said he'd outline in his address to a joint session of Congress in February.Read more: <a href="https://www.businessinsider.com/investing-outlook-trends-career-wells-fargo-equity-head-ann-miletti-2021-1" target="_blank" rel="noopener">The head of active equity at Wells Fargo's $607 billion asset-management arm shares how she worked her way up from the call center 29 years ago - and pinpoints 3 trends transforming the investment landscape today</a>

You Searched For "Nominal GDP" and got 12 results

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GDP represents the sum total of a nation's output and income

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Goldman Sachs lifts US GDP forecast to 6.6% in 2021 on Biden's $1.9 trillion stimulus package

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Biden's rescue plan could boost 2021 GDP growth to 11.4%, JPMorgan's global chief strategist says

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