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<ul class="summary-list"><li>Russia's economy is growing but headed for big trouble, researchers wrote in a recent article. </li><li>They pointed to Russia's outsized military spending, which has come at the cost of its private sector.</li></ul>Russia's wartime economic boom is masking much deeper problems, according to a group of researchers.The authors of a recent article, who hail from institutions including the Yale School of Management, the Wharton School, the Carnegie Endowment, and the Kyiv School of Economics, cast a stark warning for Russia's economic situation despite the nation posting strong growth numbers since its invasion of Ukraine in 2022.Russia's economy is expected to <a target="_blank" href="https://www.imf.org/en/Countries/RUS">expand another 2.4% this year</a>, according to figures from the International Monetary Fund. However, much of that growth stems from the Kremlin's wild spending spree, and Russia's economy is hindered by a number of problems that could set it up for trouble in the long run, the researchers said."The reality of Russia's economic situation is far more complex and concerning than some would have you believe. The productive core of the Russian economy has been severely compromised," the group wrote in <a target="_blank" class="" href="https://fortune.com/europe/2024/08/19/an-economic-catastrophe-is-lurking-beneath-russias-gdp-growth-as-putin-throws-everything-into-the-fireplace/">an op-ed for Fortune</a> this week.Russia has been spending heavily on its military and defense sectors, setting a <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-putin-ukraine-war-military-spending-budget-kremlin-inflation-2023-10">record military budget for 2024</a>. But that spending has come at a cost to Russia's private sector, some economists say, with other areas of its economy being slammed by a <a target="_blank" class="" href="https://www.businessinsider.com/russia-lacks-workers-ukraine-war-labor-crisis-worker-shortage-2023-12">severe shortage of workers</a> as resources get funneled into Russia's invasion of Ukraine.Private firms are showing signs they're unable to keep up with <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-war-spending-casualties-manpower-mobilization-labor-shortage-inflation-2024-8">consumer demand</a>. That imbalance has caused <a target="_blank" class="" href="https://www.businessinsider.com/russia-war-economy-boosts-wages-salaries-beat-inflation-labor-crunch-2024-2">wages</a> and <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-inflation-outlook-ukraine-war-gas-prices-oil-sales-2024-7">inflation</a> to spiral in the nation, prompting central bankers in Russia to <a target="_blank" class="" href="https://www.reuters.com/markets/rates-bonds/russian-central-bank-hikes-rates-by-200-bps-18-highest-more-than-two-years-2024-07-26/#:~:text=MOSCOW%2C%20July%2026%20(Reuters),an%20overheated%20economy%20come%20down.">hike interest rates to 18% in July.</a>"Simply put, Putin's administration has prioritized military production over all else in the economy, at substantial cost," the researchers wrote. Higher borrowing costs could spell trouble for Russian consumers, who are increasingly burdened by debt. <a target="_blank" class="" href="https://www.ceicdata.com/en/indicator/russia/household-debt--of-nominal-gdp">Household debt</a> accounted for 20% of Russia's total GDP at the end of the first quarter, according to CEIC data. Higher interest rates, in that backdrop, could set the nation up for a "looming crisis," the researchers added.Meanwhile, Russia's finances aren't squaring, partly because the nation is taking in less money from its <a target="_blank" class="" href="https://markets.businessinsider.com/news/commodities/russian-energy-revenue-crude-oil-prices-gas-exports-sanctions-ukraine-2024-1">oil and gas trade. </a>The nation is running a 2% budget deficit — which is "significant" by Russia's standards, the researchers added. "In conclusion, the apparent resilience of the Russian economy is largely illusory, built on a precarious foundation of unsustainable government spending and short-term market factors," the researchers wrote. "A looming economic catastrophe driven by the fundamental flaws in Russia's current strategy will likely set the stage for severe long-term consequences that will play out in the years ahead," they added.Experts have warned of a dire future for Russia as it drags its economy through a third year of war. On the extreme end, forecasters are calling for the nation to <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-collapse-recession-moscow-ukraine-war-us-dollar-energy-2024-7">enter a severe recession</a>, with most experts agreeing that the nation has <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-real-situation-economist-ukraine-war-sanctions-growth-inflation-2023-11">poor prospects for long-term growth</a>.

Russia's economic growth is masking a looming 'economic catastrophe,' researchers say

Top 10 richest women in the world in 2024

If there is one word to aptly describe the ongoing 2024 Lok Sabha <keyword id="20515965" type="General" weightage="20" keywordseo="election-results" source="keywords">election results</keyword>, specifically for the incumbent party, it would be jolting, startling, and perhaps, even surprising. The exit polls were wide off the mark, and then some. Less than a week ago, India reported a remarkable <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> rate of 8.2% for the fiscal year 2023-24. Over the weekend, exit polls predicted a clear and easy majority for the ruling Bharatiya Janata Party (BJP) and its alliance NDA. Consequently, benchmark indexes, Sensex and <keyword id="6354813" type="General" weightage="20" keywordseo="Nifty" source="Orion">Nifty</keyword>, both zoomed more than 3 per cent on Monday, breaching the all-time high records. On Tuesday, the tides turned! Putting a harsh full stop on the ruling party’s “abki baar 400 paar” narrative, the electoral situation on Tuesday evening shows less than 300 seats to the NDA and over 230 seats to the opposing INDIA bloc. What’s even more concerning for the ruling party is its tally dropping from 303 in 2019 to less than 245 this year. Consequently, on Tuesday, Sensex witnessed the steepest drop in over four years since the pandemic, recording a drop of 4,389 to settle just over 72,000. Nifty also dipped by almost 6%, standing at 21,884 points. If the trends hold, the BJP will lack a clear, simple majority on its own for the next five years, even if it manages to form a government with its pre-poll allies. The question is, how stable the new government would be, what would be the overall impact of this verdict on India’s economy, and what’s the story behind the jitters exhibited by the markets on Tuesday? <cmsannotation type="cmsannotation" annotationid="India’s incredible economic growth story" comment="subhead" text="India’s incredible economic growth story">India’s incredible <keyword id="19900794" type="General" weightage="100" keywordseo="economic-growth" source="keywords">economic growth</keyword> story </cmsannotation>Perched to be the world’s 3rd largest economy by 2027, India’s current GDP value stands at $3.9 trillion. As per FM <keyword id="20200167" type="General" weightage="20" keywordseo="Nirmala-Seetharaman" source="keywords">Nirmala Seetharaman</keyword>, the Indian economy is anticipated to grow at a rate of close to 7% in FY25 and hit $7 trillion by 2030. The <keyword id="3530620" type="General" weightage="20" keywordseo="Gross-Value-Added" source="Orion">Gross Value Added</keyword> (GVA) data supports the optimistic outlook, with a growth rate of 7.2% in FY24 compared to 6.7% in FY23. And notably, this strong economic growth has come at a time when most of the major economies across the globe are grappling with a slowdown. While few expect India to maintain a robust growth of 8.2%, most economists agree that GDP growth could moderate to around 7% in FY25. But most of these growth forecasts are contingent on a stable government and policy reforms at the centre. So, does the sharp fall in benchmark indices on Tuesday foretell a twist in India’s growth story? <cmsannotation type="cmsannotation" annotationid="Is there a twist in the tale?" comment="subhead" text="Is there a twist in the tale?">Is there a twist in the tale? </cmsannotation>Firstly, the <keyword id="16791710" type="General" weightage="20" keywordseo="foreign-portfolio-inflows" source="Orion">foreign portfolio inflows</keyword> (FPI), indicative of the global confidence reposed in the Indian markets, have been on a consistent decline over the past 3 months. As of 4th June 2024, foreign institutional investors had withdrawn a total of Rs 14,339 crores from the Indian equity markets while investing Rs 55,273 crores in debt instruments, which are traditionally reflective of safety, security, and a low-risk and change appetite. Foreign institutional investors had also withdrawn Rs 25,586 crores during May 2024, and Rs 8,671 crores during April 2024. If anything, the Indian market stands atop the strong confidence of domestic investors. The AUM (assets under management) of the Indian mutual fund industry stood at a record high of around $57 lakh crores in April 2024, even as the SIP AUM hit a record high of Rs 11.26 lakh crore. "The steep fall is due to the results so far falling short of the exit polls which the market had discounted yesterday. If BJP doesn't get a majority on its own there will be disappointment and this is getting reflected in the market. Also it is possible that Modi 3.O may not be as reform-oriented as the market expected and may turn more welfare- oriented," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. <cmsannotation type="cmsannotation" annotationid="Cautiously optimistic investors could prevail" comment="subhead" text="Cautiously optimistic investors could prevail">Cautiously optimistic investors could prevail </cmsannotation>But does this mean India’s growth story stands threatened or even jeopardized? Even though social media is flooded with memes that might lead one to believe it is all over for India’s story, the country remains the fastest growing economy amongst all G-20 nations in 2024, compelling almost all rating agencies to positively hike the country’s potential growth rate. But, equally noticeable is the fact that India’s private consumption, a major indicator of the economy’s growth, jumped by only 3.5% over the last 3 months of 2024. India now makes up 6.7% of the world’s GDP by purchasing power parity (PPP). As figures go, India is set to become a $10 trillion economy by 2030. Veteran investors like Raamdeo Agrawal, who heads Motilal Oswal Financial Services, believe that India’s potential growth rate of 8-8.5% is not going anywhere and that NDA’s leadership is here to stay. In his words, if an investor has managed to make 4-5x in the last 3-4 years, one will have to give in 20-30%. But that is where you will have to persist as an investor. "With the NDA still looking to form a government, though with the important support of coalition partners, markets look jittery about the prospects of strong decision making. Markets believe that the reformistic approach, which was a hallmark of the previous two terms, might take a backseat in the third term. However, our sense is that it is still early to jump to conclusions and should ideally wait for a clearer picture," said Manish Chowdhury, Head of Research, StoxBox. But all in all, the NDA government is most likely to stay for the full term, and those who bet on the same stand to stay safe despite the surprisingly strong performance of the INDIA alliance. However, in the end, the only one who wins in the market stays put in the market in the long run. Because NDA, or INDIA, compounding is here to stay, all set to immensely benefit long-term investors. (With inputs ANI)

Economic implications of Lok Sabha Election 2024 results: Would lack of a clear majority for BJP impact India’s growth story?

Prime Minister Narendra Modi, on Wednesday, congratulated Reserve Bank of India's (RBI) Governor, Shaktikanta Das for bagging an A+ grade rating in the Global Finance Central Banker Report Cards 2024. Prime Minister in a post on social media "X" said, "Congratulations to RBI Governor Shri @DasShaktikanta for this feat, and that too for the second time. This is a recognition of his leadership at the RBI and his work towards ensuring <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> and stability." <keyword id="20850250" type="General" weightage="20" keywordseo="RBI-Governor-Das" source="keywords">RBI Governor Das</keyword> has been awarded the A+ grade rating for the second consecutive year. The Central Banker Report Cards, published annually by Global Finance since 1994, grade the central bank governors of nearly 100 key countries, territories, and districts, as well as the European Union, the Eastern Caribbean Central Bank, the Bank of Central African States and the Central Bank of West African States. Grades are based on an "A+" to "F" scale for success in areas such as <keyword id="21364628" type="General" weightage="20" keywordseo="inflation-control" source="keywords">inflation control</keyword>, economic growth goals, currency stability and <keyword id="22859834" type="General" weightage="20" keywordseo="interest-rate-management" source="keywords">interest rate management</keyword>. "A" represents an excellent performance, down through "F" for outright failure. "Central bankers have waged war against <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> over the past few years, wielding their primary weapon: higher interest rates. Now, countries around the world are witnessing the tangible results of these efforts, as inflation has dropped significantly," said Global Finance founder and editorial director Joseph Giarraputo. The RBI has been successful in controlling the larger macroeconomic situations in the country. The apex bank is actively working to push economic growth through its <keyword id="20900764" type="General" weightage="20" keywordseo="monetary-policies" source="keywords">monetary policies</keyword>. The RBI recently kept the the <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword> unchanged at 6.5 per cent after the deliberations of the Monetary Policy Commitee meeting earlier this month. The move reflects the central bank's cautious approach amid ongoing economic uncertainties. Announcing the monetary policy decisions, Das had said that the decision to keep the repo rate steady comes amidst persistent concerns about inflation, which remains above the RBI's target range. RBI Governor Das said that the inflation will moderate from July onwards as the monsoon has improved and global food prices have shown signs of easing in July. The Q1 <keyword id="19999655" type="General" weightage="20" keywordseo="Consumer-Price-Index" source="keywords">Consumer Price Index</keyword> (CPI) inflation for the current financial year (2024-25) is projected at 4.5 per cent. CPI inflation for the first quarter of the next financial year (Q1 2025-26) is projected at 4.4 per cent, as announced by the RBI Governor. India's retail inflation, after breaching 5 per cent in June, softened drastically in July. In line with the moderation in retail inflation, wholesale inflation in India too witnessed a sharp decline in July. The annual rate of inflation based on all India Wholesale Price Index (WPI) numbers is 2.04 per cent (provisional) for July 2024 (over July 2023).

PM Modi congratulates RBI Governor Das on A+ rating in Global Finance Report

Stock markets all over the world, including Sensex, Nifty, Nikkei, and NASDAQ fell significantly today, as they reacted to weak US labor market data, with unemployment rates inching up to 4.3%, from 4.1% in July 2024. In response, the Nikkei 225 dipped around 4,451 points, witnessing the worst losses it has seen since 1987. On the other hand, the Sensex plunged over 2,000 points, and the NASDAQ also slipped 417.98 points. Nifty also closed the day at 24,055.60, down by 2.68%. Closer home, the D-Street mayhem wiped of Rs 15 lakh crore worth of investor wealth in a single day. While this might spook even seasoned investors, should this bloodbath drive you to exit the market, or is it time for you to go on a quality stock buying spree? Here's what the experts have to say <h2>Market corrections = Opportunities </h2>Vinnaayak Mehta, Founder, The Infinity Group, a personal finance consultancy says that given the current market downturn, it is important for investors to stay calm, and not make any hasty decisions. "Market corrections can offer opportunities to buy quality stocks at more attractive valuations. Investors should take this time to evaluate their portfolios, focusing on long-term goals and strong fundamentals rather than short-term <keyword id="19908008" type="General" weightage="20" keywordseo="volatility" source="keywords">volatility</keyword>. This period of correction may present a chance to reassess asset allocations and consider strategic adjustments", he says. <h2>Expect low returns in the short run</h2> Mr. Sandeep Bagla, CEO of Trust Mutual Funds advises investors to keep their return expectations low and realistic, at least in the short run. Invest only if you have a suitably long <keyword id="19895437" type="General" weightage="20" keywordseo="investment" source="keywords">investment</keyword> horizon. This will help you go through an imminent, upcoming market correction, along with helping you tide over periods of volatility in the interim. "Markets like India, where domestic economy is like more resilient than other economies, could be less affected in the mayhem. However, you should keep systematically investing in the stock markets, and not hit brakes on your investments. Stay invested to reap benefits from growth over the long term", he explains. <h2>Indians markets are relatively safe </h2>As per Siddharth Alok, AVP Investments, Multi Ark Wealth-Epsilon Money Group, investors should consider buying in these dips, but only if their investing horizon is over 3 years. "As valuations further rise, these sudden down moves might become more frequent. Equity markets returns are never linear. However, the direct impact on Indian markets remains limited; this can be seen from the overall relative strength that domestic markets are witnessing, while <keyword id="19908188" type="General" weightage="20" keywordseo="global-markets" source="keywords">global markets</keyword> are down 10-20%, Indian markets are hardly down 5% including today from their recent peaks", highlights Alok. <h2>Invested heavily in small and mid caps? Time to move </h2> During any market corrections, mid and small caps are the first in line of fire. Given that both of these segments are far more volatile, as compared to their stable, large-cap counterparts, the impact of a correction is far more visible on small cap and mid cap stocks. As Jay Shah, Founder &amp; CEO, Finwisor puts it, "when the markets are at rich valuations, the markets become fragile and look for opportunities to correct. The correction generally happens disproportionately-more in small caps and less in large caps". Amidst today's rout, while Nifty50, an index of India's top 50 companies by market capitalization stumbled about 2.68%, Nifty midcap 50 was down by 3.28%, while midcap 100 plunged by 3.55%. Going a step ahead, Nifty small cap 100, a larger universe of just small cap stocks, dipped by 4.57%. In such a situation, Shah suggests that long-term investors who are sticking to their asset allocation strategies should sit still, while those who are heavily invested in midcaps and small caps should move their investments large-cap stocks. And in case one is sitting on idle cash, this is a good time to start deploying their funds in the market.

Stock market crash: What should your next move be?

Ah, <keyword id="18712" type="General" weightage="20" keywordseo="Gold" source="Orion">gold</keyword>! The shiny metal that's been making humans lose their minds since time immemorial. And yet, from King Midas to our neighbourhood aunty and even our moms (and secretly dads), everyone seems to have a super soft spot for the bullion. But here's the kicker: right now, gold prices are breaking all records on their upward trajectory! As of today, prices of 24k carat gold have passed the Rs 80,000 mark per 10 grams. And if experts are to be believed, this train isn't stopping anytime soon! So, as shiny as gold might look, adding even a bit of its glitter as we start decking up for the festive season might not be so easy on your pockets. But let's admit it—we love our gold and can't live without it. No wonder India is the second-largest consumer of the yellow metal in the world, only behind <keyword id="1334" type="General" weightage="20" keywordseo="China" source="Orion">China</keyword>. Such is our fondness for the metal that the <keyword id="20195223" type="General" weightage="20" keywordseo="world-gold-council" source="keywords">World Gold Council</keyword> had to up our 2024 annual demand forecast to 850 tonnes, up from the previously estimated 750 tonnes. However, our love for gold isn't just about looking fabulously embellished and blinding people with its bling. Indians also see gold as a long-term, trusty investment, supporting our other hard-earned assets, especially when high <keyword id="22195" type="General" weightage="20" keywordseo="Inflation" source="Orion">inflation</keyword> rates pull our returns down. After all, while inflationary pressures generally weaken the purchasing power of our regular paper money, gold is built differently. When the world is buckling to inflation, gold gains value during these times. This is also why it is considered a solid hedge against inflation. With Diwali and Dhanteras knocking at our doors, the inflation demon continued to bother India like a guest who refused to leave. Just last month, the Consumer Price Index (CPI) stood at 5.49%, much higher than the anticipated levels. Moreover, the diverging policy stances among central bankers worldwide, growing geopolitical tensions, tough job markets, and extreme weather events are only adding to the uncertainty. In such economically uncertain times, what should your gold strategy be this festive season? To buy or not to buy, that is the question. Well, let’s get to it. <h2><keyword id="20050894" type="General" weightage="100" keywordseo="gold-etfs" source="keywords">Gold ETFs</keyword> to the rescue</h2>See, buying physical gold jewellery is certainly a flex, but also a financial fuss. First, you pay a heavy amount to buy gold. Not to mention all those extra, hefty jewellery-making charges. And then you pay even more money to keep it safe in a bank locker, lest it get stolen. But what if we tell you that you can own pure <keyword id="3311599" type="General" weightage="20" keywordseo="24K-gold" source="Orion">24k gold</keyword>, minus all these frills? Welcome, Gold ETFs (Exchange Traded Funds). Simply put, gold ETFs are like the cool cousins of your traditional gold investments. Instead of stashing gold bars under your mattress like those maniac millionaires we see in Bollywood films, you can now invest and trade in gold through the stock market. It's basically buying units of an ETF on the stock exchange that directly mirror the ongoing domestic prices of gold. Generally, gold ETFs are equivalent to 99.5% pure physical gold bars, and each ETF unit denotes actual, one gram of gold. And let's face it, who would not want that golden glow in their lives? Gold ETFs have witnessed an over seven-fold surge in their AUM (assets under management) in just the last five years. From Rs 5,613.22 crore in September 2019 to Rs 39,823.50 crore in September 2024, gold ETFs seem to be in-thing. Inflows in gold ETFs have shot up by a whopping 2,695% over the last 5 years. In September 2019, gold ETFs had garnered a mere Rs 44.11 crore. Compare that to the inflows worth Rs 1,232.99 crore gold ETFs received last month. Talk about growing, or glowing popularity! In fact, in just 2024, inflows in gold ETFs have surged by nearly 88% since the beginning of this calendar year. From Rs 657.46 crore in January 2024 to Rs 1,232.99 crore in September 2024, good old gold is never out of season. <h2>So, how do these ETFs work? Should I invest in them now?</h2>All you need is a Demat account. Log into your account, choose the gold ETF scheme you want to invest in, and voila! You’re now a bullion-aire! All your gold ETF units will be stored in this account. Then, you can buy and sell gold ETFs just like you buy shares—in real-time. So, if gold prices inch upwards, which is where gold is currently going, the value of your ETF units will also rise in lockstep. Ashwini Kumar, Senior Vice President and Head of Market Data at ICRA Analytics, says that of late, gold ETFs have been increasingly gaining popularity among investors due to the liquidity, safety and transparency they offer. "With the escalating global geopolitical tensions boosting the ‘safe-haven’ appeal of the bullion, investors are preferring to park their funds in gold ETFs as compared to investing in physical gold, as there is no hassle of storing it. The heightened activity in gold ETFs is also driven by the prospects of an imminent further interest rate cut by the <keyword id="20078761" type="General" weightage="20" keywordseo="u-s-federal-reserve" source="keywords">U.S. Federal Reserve</keyword> in the coming months,” he added. “Investors with a short- to medium-term investment horizon may consider investment through gold ETFs. A buy-on-dips strategy here may help investors capitalise on a temporary correction in prices. Also, given the current market dynamics where equities are showing mixed trends, a modest, 5-10% allocation to gold may serve as a hedge against inflation and market volatility, which may help you balance risks in an optimum manner,” Kumar noted. <h2> Wait, there is no dearth of options</h2>But if ETFs make you go WTF, there’s always digital gold. You can invest in the yellow metal without actually physically holding it for as low as Rs 1. The best part? You can buy or sell this gold 24 X7 seamlessly via multiple apps without having to pay storage costs. On your behalf, your gold is stored in insured vaults by the seller. But remember, digital gold continues to remain unregulated territory in the country, where you venture at your own risk. In 2021, market watchdog SEBI had even asked its members to desist from selling digital gold. Then there are gold mutual funds and the Sarkari SGBs, or sovereign gold bonds. While gold mutual funds invest primarily in gold ETFs, SGBs are issued by the <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> and are also a reliable substitute for holding physical gold. However, with the RBI currently putting brakes on issuing SGBs, investing in them is out of the question. Plus, you should only get your hands on SGBs if you're in for the long haul. Apart from a 2.5% p.a. interest, you don't have any yearly earnings from them. Moreover, no premature redemption is allowed before 5 years, and you'll have to wait a good 8 years to maximise your returns. <h2> Okay, tell me about returns</h2>In contrast, the seventeen gold ETF schemes currently present in the market offer an average one-year return of 29.12%. Stay with it a little longer, and you can end up with returns worth 16.93% and 13.59% over a 3 and 5-year period, respectively. If you look at it, these returns are comparable with the returns delivered by actual, physical gold. Data from Value Research indicates that gold, as a commodity, has delivered returns worth 27.24%, 16.53%, and 14.18% over a 1, 3, and 5-year period, respectively. So, worth investing, right? <h2>What are the risks?</h2>See, stock markets are as unpredictable as monsoons in Mumbai. One significant market correction can wash away your returns, and one sunny day or an upswing can leave you wallowing in wealth. Since your gold investments are directly linked to these markets, you should steel yourself up for some volatility. Plus, international gold prices are in dollars. So, if our rupee decides to take a nosedive, your returns might look a bit tarnished. Also, know that your ETF might not always perfectly mirror gold prices, which is also known as a tracking error. It's like expecting your Zomato-ordered food to look exactly like the picture on the menu—it's close, but not quite. Then there’s the taxation bit. The budget this year brought down the <keyword id="20552259" type="General" weightage="20" keywordseo="ltcg" source="keywords">LTCG</keyword> (long-term capital gains tax) on gold ETFs from the previous 20% to 12.5% (sans indexation). LTCG is what you pay if you sell your ETF units after 12 months. If you sell your gold ETF units within a year and make handsome returns, the tax you’ll have to pay will be equivalent to your income tax slab rate. <h2>Is gold just for old?</h2>A survey by fintech firm Moneyview thinks otherwise. Per their findings, over 85% of the 3,000 respondents it talked to considered gold to be a valuable asset for wealth preservation, with its intrinsic value and historical performance continuing to drive consumer confidence. Particularly, young investors in the age group of 25–40 years are also investing in gold via both physical and digital ways to build wealth for retirement and other long-term goals. So, young or old, everyone’s going for gold. So, this festive season, with gold prices going north, investing in gold can add that much-needed glitz to your financial attire. But remember, don't go overboard since gold isn't exactly a high-return-yielding asset. But whether you're a seasoned investor looking to diversify or a newbie trying to make their way in the markets, investing in gold offers you a glittering safety cushion. Just remember, while gold can make your portfolio shine, it's your smart investment decisions that truly make you golden. Disclaimer: The content on this website is for informational purposes only and should not be construed as investment advice. We recommend readers consult certified, qualified, and registered advisors for professional and personalised financial advice.

Can investing in gold this festive season add the much-touted Midas touch to your investments?

<div type="image" title="Save yourself the trouble of buying physical gold this Diwali, and instead, go digital with Gold ETFs!" height="900" width="1200" msid="114507055" hostid="261" sizebytes="439216" caption="&amp;lt;p&amp;gt;Save yourself the trouble of buying physical gold this Diwali, and instead, go digital with Gold ETFs!&amp;lt;/p&amp;gt;"></div> Ah, <keyword id="18712" type="General" weightage="20" keywordseo="Gold" source="Orion">gold</keyword>! The shiny metal that's been making humans lose their minds since time immemorial. And yet, from <keyword id="23657519" type="General" weightage="20" keywordseo="king-midas" source="keywords">King Midas</keyword> to our neighbourhood aunty and even our moms (and secretly dads), everyone seems to have a super soft spot for the <keyword id="6384667" type="General" weightage="20" keywordseo="Bullion" source="Orion">bullion</keyword>. But here's the kicker: right now, gold prices are breaking all records on their upward trajectory! As of today, prices of 24k carat gold have passed the Rs 80,000 mark per 10 grams. And if experts are to be believed, this train isn't stopping anytime soon! So, as shiny as gold might look, adding even a bit of its glitter as we start decking up for the festive season might not be so easy on your pockets. But let's admit it—we love our gold and can't live without it. No wonder India is the second-largest consumer of the yellow metal in the world, only behind China. Such is our fondness for the metal that the <keyword id="20195223" type="General" weightage="20" keywordseo="world-gold-council" source="keywords">World Gold Council</keyword> had to up our 2024 annual demand forecast to 850 tonnes, up from the previously estimated 750 tonnes. However, our love for gold isn't just about looking fabulously embellished and blinding people with its bling. Indians also see gold as a long-term, trusty investment, supporting our other hard-earned assets, especially when high <keyword id="22195" type="General" weightage="20" keywordseo="Inflation" source="Orion">inflation</keyword> rates pull our returns down. After all, while inflationary pressures generally weaken the purchasing power of our regular paper money, gold is built differently. When the world is buckling to inflation, gold gains value during these times. This is also why it is considered a solid hedge against inflation. With <keyword id="188" type="General" weightage="20" keywordseo="Diwali" source="Orion">Diwali</keyword> and <keyword id="4067" type="General" weightage="20" keywordseo="Dhanteras" source="Orion">Dhanteras</keyword> knocking at our doors, the inflation demon continued to bother India like a guest who refused to leave. Just last month, the Consumer Price Index (CPI) stood at 5.49%, much higher than the anticipated levels. Moreover, the diverging policy stances among central bankers worldwide, growing geopolitical tensions, tough job markets, and extreme weather events are only adding to the uncertainty. In such economically uncertain times, what should your gold strategy be this festive season? To buy or not to buy, that is the question. Well, let’s get to it. <h2><keyword id="20050894" type="General" weightage="100" keywordseo="gold-etfs" source="keywords">Gold ETFs</keyword> to the rescue</h2>See, buying physical gold jewellery is certainly a flex, but also a financial fuss. First, you pay a heavy amount to buy gold. Not to mention all those extra, hefty jewellery-making charges. And then you pay even more money to keep it safe in a bank locker, lest it get stolen. But what if we tell you that you can own pure 24k gold, minus all these frills? Welcome, Gold ETFs (Exchange Traded Funds). Simply put, gold ETFs are like the cool cousins of your traditional gold investments. Instead of stashing gold bars under your mattress like those maniac millionaires we see in Bollywood films, you can now invest and trade in gold through the stock market. It's basically buying units of an <keyword id="19930506" type="General" weightage="20" keywordseo="etf" source="keywords">ETF</keyword> on the stock exchange that directly mirror the ongoing domestic prices of gold. Generally, gold ETFs are equivalent to 99.5% pure physical gold bars, and each ETF unit denotes actual, one gram of gold. And let's face it, who would not want that golden glow in their lives? Gold ETFs have witnessed an over seven-fold surge in their AUM (assets under management) in just the last five years. From Rs 5,613.22 crore in September 2019 to Rs 39,823.50 crore in September 2024, gold ETFs seem to be in-thing. Inflows in gold ETFs have shot up by a whopping 2,695% over the last 5 years. In September 2019, gold ETFs had garnered a mere Rs 44.11 crore. Compare that to the inflows worth Rs 1,232.99 crore gold ETFs received last month. Talk about growing, or glowing popularity! In fact, in just 2024, inflows in gold ETFs have surged by nearly 88% since the beginning of this calendar year. From Rs 657.46 crore in January 2024 to Rs 1,232.99 crore in September 2024, good old gold is never out of season. <h2>So, how do these ETFs work? Should I invest in them now?</h2>All you need is a Demat account. Log into your account, choose the gold ETF scheme you want to invest in, and voila! You’re now a bullion-aire! All your gold ETF units will be stored in this account. Then, you can buy and sell gold ETFs just like you buy shares—in real-time. So, if gold prices inch upwards, which is where gold is currently going, the value of your ETF units will also rise in lockstep. Ashwini Kumar, Senior Vice President and Head of Market Data at ICRA Analytics, says that of late, gold ETFs have been increasingly gaining popularity among investors due to the liquidity, safety and transparency they offer. "With the escalating global geopolitical tensions boosting the ‘safe-haven’ appeal of the bullion, investors are preferring to park their funds in gold ETFs as compared to investing in physical gold, as there is no hassle of storing it. The heightened activity in gold ETFs is also driven by the prospects of an imminent further interest rate cut by the <keyword id="20078761" type="General" weightage="20" keywordseo="u-s-federal-reserve" source="keywords">U.S. Federal Reserve</keyword> in the coming months,” he added. “Investors with a short- to medium-term investment horizon may consider investment through gold ETFs. A buy-on-dips strategy here may help investors capitalise on a temporary correction in prices. Also, given the current market dynamics where equities are showing mixed trends, a modest, 5-10% allocation to gold may serve as a hedge against inflation and market volatility, which may help you balance risks in an optimum manner,” Kumar noted. <h2>Wait, there is no dearth of options</h2>But if ETFs make you go WTF, there’s always digital gold. You can invest in the yellow metal without actually physically holding it for as low as Rs 1. The best part? You can buy or sell this gold 24 X7 seamlessly via multiple apps without having to pay storage costs. On your behalf, your gold is stored in insured vaults by the seller. But remember, digital gold continues to remain unregulated territory in the country, where you venture at your own risk. In 2021, market watchdog SEBI had even asked its members to desist from selling digital gold. Then there are gold mutual funds and the Sarkari SGBs, or sovereign gold bonds. While gold mutual funds invest primarily in gold ETFs, SGBs are issued by the RBI and are also a reliable substitute for holding physical gold. However, with the RBI currently putting brakes on issuing SGBs, investing in them is out of the question. Plus, you should only get your hands on SGBs if you're in for the long haul. Apart from a 2.5% p.a. interest, you don't have any yearly earnings from them. Moreover, no premature redemption is allowed before 5 years, and you'll have to wait a good 8 years to maximise your returns. <h2>Okay, tell me about returns</h2>In contrast, the seventeen gold ETF schemes currently present in the market offer an average one-year return of 29.12%. Stay with it a little longer, and you can end up with returns worth 16.93% and 13.59% over a 3- and 5-year period, respectively. If you look at it, these returns are comparable with the returns delivered by actual, physical gold. Data from Value Research indicates that gold, as a commodity, has delivered returns worth 27.24%, 16.53%, and 14.18% over a 1, 3, and 5-year period, respectively. So, worth investing, right? <h2>What are the risks?</h2>See, markets are as unpredictable as monsoons in Mumbai. One significant market correction can wash away your returns, and one sunny day or an upswing can leave you wallowing in wealth. Since your gold investments are directly linked to these markets, you should steel yourself up for some volatility. Plus, international gold prices are in dollars. So, if our rupee decides to take a nosedive, your returns might look a bit tarnished. Also, know that your ETF might not always perfectly mirror gold prices, which is also known as a tracking error. It's like expecting your Zomato-ordered food to look exactly like the picture on the menu—it's close, but not quite. Then there’s the taxation bit. The budget this year brought down the LTCG (long-term capital gains tax) on gold ETFs from the previous 20% to 12.5% (sans indexation). LTCG is what you pay if you sell your ETF units after 12 months. If you sell your gold ETF units within a year and make handsome returns, the tax you’ll have to pay will be equivalent to your income tax slab rate. <h2>Is gold just for old?</h2>A survey by fintech firm Moneyview thinks otherwise. Per their findings, over 85% of the 3,000 respondents it talked to considered gold to be a valuable asset for wealth preservation, with its intrinsic value and historical performance continuing to drive consumer confidence. Particularly, young investors in the age group of 25–40 years are also investing in gold via both physical and digital ways to build wealth for retirement and other long-term goals. So, young or old, everyone’s going for gold. So, this festive season, with gold prices going north, investing in gold can add that much-needed glitz to your financial attire. But remember, don't go overboard since gold isn't exactly a high-return-yielding asset. But whether you're a seasoned investor looking to diversify or a newbie trying to make their way in the markets, investing in gold offers you a glittering safety cushion. Just remember, while gold can make your portfolio shine, it's your smart investment decisions that truly make you golden. Disclaimer: The content on this website is for informational purposes only and should not be construed as investment advice. We recommend readers consult certified, qualified, and registered advisors for professional and personalised financial advice.

Simply put: Can investing in gold this festive season add the much-touted Midas touch to your investments?

As the <keyword id="19938590" type="General" weightage="100" keywordseo="NDA" source="keywords">NDA</keyword> is all set to form the government, <keyword id="19949381" type="General" weightage="20" keywordseo="Fitch-Ratings" source="keywords">Fitch Ratings</keyword> on Thursday said <keyword id="21935526" type="General" weightage="20" keywordseo="coalition-politics" source="keywords">coalition politics</keyword> and a <keyword id="21957811" type="General" weightage="20" keywordseo="weakened-mandate" source="Orion">weakened mandate</keyword> could make it challenging to pass legislations on ambitious reforms. "We believe major reforms to land and labour laws will remain on the new government's agenda as it seeks to enhance India's manufacturing sector, but these have long been contentious and the NDA's weaker mandate will complicate their passage further. This could reduce the potential upside to India's medium-term growth prospects," <keyword id="19950093" type="General" weightage="20" keywordseo="fitch" source="keywords">Fitch</keyword> said in a statement. The <keyword id="19894848" type="General" weightage="20" keywordseo="bjp" source="keywords">BJP</keyword> fell short of a single-party majority in the 543-seat lower house of parliament for the first time since its latest period in government that began in 2014. But Fitch expects it to secure enough support from allied parties in the National Democratic Alliance (NDA) to form a government with Narendra Modi remaining Prime Minister. The outcome should support broad policy continuity, with the government continuing to prioritise infrastructure capex, improvements to the business environment, and gradual fiscal consolidation, Fitch Ratings said. "However, coalition politics and a weakened mandate could make it challenging to pass legislation on the more ambitious parts of the <keyword id="21957445" type="General" weightage="20" keywordseo="government-reform" source="keywords">government reform</keyword> agenda," it said in a detailed note post the Lok Sabha election results which were announced late on Tuesday. The NDA appears set to retain power with a narrower majority after India's recent election, following a weaker performance by its dominant member, the Bharatiya Janata Party (BJP). "We do not think that the government's losses at the ballot box will lead to substantial policy adjustments, but the post-election budget in July should provide greater clarity on its economic reform priorities and fiscal plans over the coming five years," Fitch said. It said implementation of <keyword id="20404815" type="General" weightage="20" keywordseo="economic-reforms" source="keywords">economic reforms</keyword> during the first two NDA terms was mixed, but some positive measures were passed including the Goods and Services Tax (GST) law and Bankruptcy Code in 2016. The government also increased public infrastructure investment significantly, helping to put India among the fastest-growing major economies in recent years, with real GDP growth reaching 8.2 per cent in the fiscal year ending March 2024 (FY24). Fitch expects growth to remain rapid at 7 per cent in current fiscal (April-March). "We expect India's medium-term growth performance to remain around our trend estimate of 6.2 per cent through FY28, despite the government's slimmer majority. The continued public capex drive to address infrastructure gaps, ongoing digitalisation efforts, and improved bank and corporate balance sheets - relative to the pre-pandemic situation - should facilitate a strong outlook for private investment," Fitch said. The rating agency expects the Production-Linked Incentives (PLI) scheme to remain intact, which will help attract FDI in target sectors, such as electronics. However, private investment has not yet accelerated meaningfully, which represents a risk for the outlook. Fitch believe land and labours laws reforms will continue to advance at the state level in some parts of the country. There is also some potential for judicial reforms that would look to lower costs and speed resolution of court cases. Weaker fiscal metrics relative to peers are a significant constraint for India's sovereign rating, which we affirmed at 'BBB-' with a Stable Outlook in January 2024. "The next government's ability to address high fiscal deficits and reduce debt will be important considerations for the rating in the next few years. "Sustained deficit reduction, particularly if underpinned by durable revenue-raising reforms, would be positive for India's sovereign rating fundamentals over the medium term," Fitch added. The government has improved its record on achieving deficit targets and has advanced fiscal consolidation gradually over the past few years. We expect this focus on gradual consolidation to broadly be sustained. The FY24 budget deficit came in at 5.6 per cent of GDP, below the revised budget estimate of 5.8 per cent (which matched Fitch's estimate). Fitch expects the 5.1 per cent deficit target for FY25 to be attained, and said government's goal of reducing the deficit to 4.5 per cent of GDP in FY26 appears increasingly achievable, although the election marginally increased risks of higher spending or slippage in capex to accommodate greater social spending.

Coalition politics, weakened mandate could make passing legislations on ambitious reforms challenging: Fitch

<ul><li>Among the group of top 10 economies, the most positive prospects in terms of international trade are related to India, said an S&amp;P report. </li><li>It also said that the country does not seem to be impacted by the global economic slowdown to a large extent.</li></ul>New Delhi [India], November 18 (ANI): Among the group of top 10 economies, the most positive prospects in terms of international trade are related to India and the country does not seem to be impacted by the global economic slowdown to a large extent, S&amp;P Global Market Intelligence said in its latest Global Trade Monitor report. The top 10 economies by GDP in 202, according to the report, include the US, EU27, mainland China, Japan, the UK, India, Brazil, South Korea, Canada, and Russia. These countries are responsible for approximately four-fifths of the world GDP and three-quarters of global exports, with most trade carried out within the group. The section in the report on expectations for international trade in the next months said the global economic slowdown now is more and more visible. Monthly historical data clearly shows that in the top 10 economies exports are primarily impacted slowing down in the majority of economies within the group. "The picture is slightly more optimistic for imports, yet the situation is expected to deteriorate in the forthcoming months for both exports and imports, which is reflected in the most recent PMI NExO readouts," the report said. The consequences of the global economic slowdown are not that apparent in the monthly data for 2022 as in the first three quarters of the year, the dynamics of exports and imports were relatively strong in the top 10 economies. "This should translate in still positive growth in 2022 from the yearly perspective, yet in 2023 global trade contraction may be expected. GTAS Forecasting expects trade recovery to start in 2024, returning to the long-term stable growth path," it added. On economic growth, the report said the months ahead will likely bring recessions in Europe, the US, Canada, and parts of Latin America. With moderate growth in Asia Pacific, the Middle East, and Africa, the world economy can avoid a downturn, but growth will be minimal. Global real GDP growth is projected to slow from 5.9 per cent in 2021 to 2.8 per cent current year and 1.4 per cent in 2023. Notably, S&amp;P Global Market Intelligence revised down the 2023 growth rate 0.6 percentage point from the last month's forecast. (ANI)

India has the best international trade prospects among top 10 economies: S&P

<ul class="summary-list"><li>China's economy isn't doing as bad as it seems, according to economist Nancy Qian.</li><li>The country's economy is still on track to grow 5% this year, per OECD forecasts.</li></ul><a href="https://www.businessinsider.com/china-economy-global-markets-xi-deflation-property-housing-evergrande-developers-2023-8#:~:text=China's%20economy%20is%20facing%20headwinds,warned%20of%20China's%20spillover%20risks.">China has appeared to be flailing</a> since coming out of its COVID-19 lockdowns at the end of last year, with pundits and observers predicting a dire situation for the world's second largest economy – but Beijing's economic situation actually isn't as bad as it seems, according to one economist.Though it's weighed down by a <a href="https://markets.businessinsider.com/news/bonds/china-property-crisis-deepens-market-value-wipeout-developers-usd-bonds-2023-8">bloated property sector</a> and <a href="https://www.businessinsider.com/china-economy-aging-population-demographics-america-finance-markets-beijing-xi-2023-8">looming demographic problems</a>, China's economic growth actually clocked in at 6.3% year-over-year over the second quarter, according to the Organization for Economic Cooperation and Development.The nation is on track to see GDP post a 5.1% growth this year, followed by a 4.6% growth in 2024, OECD economists forecasted in September. That's the second-highest projected growth rate among countries tracked by the OECD, with the US, by comparison, slated to grow just 2.2% this year.Even China's youth unemployment rate, which hit a record 21% earlier this summer, isn't that bad when looking at other economies, Northwestern University economics professor Nancy Qian argued. Youth unemployment rates in nations like Italy, Spain, and Sweden have stayed around 20% for even longer, according to Qian, who is the co-director of Northwester's Poverty Research Lab and the founding director of the China Econ Lab."But is China's economy really in dire straits? The short answer is no," Qian said in <a href="https://www.project-syndicate.org/commentary/china-youth-unemployment-not-so-bad-by-nancy-qian-1-2023-09" target="_blank" rel="noopener">an op-ed for Project Syndicate</a> on Monday. "The gap between perception and reality can be partly attributed to how China's exceptional economic performance over the decades has influenced the public's expectations."Those outsized expectations have largely been fueled by China's 10% annual growth rate over the past two decades, a winning streak that was bound to lose steam eventually, Qian said. China's comparatively slow economy this year was also exacerbated by the pandemic lockdown, which has hindered demand, as well as by <a href="https://markets.businessinsider.com/news/stocks/china-winning-us-trade-war-dollar-vs-yuan-ray-dalio-2023-2">China's trade war with the US</a>, and monetary policy missteps by its central bank, she added.Experts have warned of a sluggish future for China if Beijing fails to resolve key debt and demographic problems plaguing the country. That could lead to a "lost decade," a period of stagnation similar to what Japan experienced in the 1990s.

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