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India's GDP growth is projected at 7.2 per cent in 2024-25, around 7 per cent in the next fiscal, and after that, there is a strong likelihood that the growth will revert to the 8 per cent trend, said <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> deputy governor <keyword id="20244361" type="General" weightage="20" keywordseo="Michael-Debabrata-Patra" source="keywords">Michael Debabrata Patra</keyword>. He was speaking at the New York Fed Central Banking Seminar organised by the <keyword id="20238413" type="General" weightage="20" keywordseo="Federal-Reserve-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="Federal Reserve Bank" meta.hostid="261" meta.entityid="Federal Reserve Bank">Federal Reserve Bank</keyword> here on Monday. "...I do believe with all the strength of my conviction that India's time has come," he said, and highlighted the country heads into its future with the youngest population in the world with a median age of 28 years. Unlike in many parts of the world, the working age population is growing -- every sixth working age person is an Indian. Patra said that since independence in 1947, India's growth path has undergone three structural shifts with trend growth, having risen to 7 per cent during 2002-2019. After the severe contraction during the pandemic, a new growth trajectory averaging 8 per cent seems to be forming during 2021-24, he said. India is now regarded as the fastest growing major economy in the world. Already the fifth largest economy in terms of market exchange rates, it is poised to become the third largest economy by 2030, the senior RBI official said and added the country is already the third largest economy in terms of <keyword id="20776921" type="General" weightage="20" keywordseo="purchasing-power-parity" source="keywords">purchasing power parity</keyword>. "Our projections show that India's <keyword id="21013593" type="General" weightage="20" keywordseo="real-GDP-growth" source="keywords">real GDP growth</keyword> will be 7.2 per cent in 2024-25 and around 7.0 per cent in 2025-26 in a cyclical correction to the rebound from the pandemic. Thereafter, there is a strong likelihood that India's growth will revert to the 8 per cent trend," Patra said. On inflation, he said it is projected to average 4.5 per cent in 2024-25 and 4.1 per cent in 2025-26. Consumer Price Index (CPI) based inflation fell below target during July-August but rose to 5.5 per cent in September on the back of a pickup in price momentum in some food items and adverse base effects inherent in year-on-year measurement. "Our projection indicates that these price pressures will persist in October and November before headline inflation realigns with the target from December 2024 and remains aligned in 2025-26," the deputy governor said. He also emphasised that India is emerging as a world leader in leveraging <keyword id="20181895" type="General" weightage="20" keywordseo="digital-technologies" source="keywords">digital technologies</keyword> for transformative change.

India likely to grow at 7.2% in FY25, says RBI deputy governor

<ul class="summary-list"><li>Investors are worried that labor market weakness could thwart a soft landing.</li><li>However, Goldman Sachs' Joseph Briggs doesn't think there's reason for concern.</li></ul>As inflation creeps downward, investors are increasingly turning their attention to the labor market to look for clues of a soft landing.Both July and August employment data fell short of Wall Street expectations after revealing lower-than-expected job additions, sparking fears of a recession and sending stocks tumbling. The highly anticipated September jobs data will be released this Friday.Investors shouldn't be worried, though. Labor market fundamentals remain strong, according to Joseph Briggs, co-lead of Goldman Sachs' global economics team and a former Federal Reserve senior economist."If we take a broad assessment across a number of different labor market indicators, they are still roughly where they were from 2017 to 2019, and that was a pretty healthy labor market," Briggs said.In Briggs' view, the following three indicators point to a normalizing late-cycle labor market, and in turn, a strong economy.<h2 id="8324345f-3390-4c5f-b3f9-7002460cb3bb">3 signs of a healthy labor market</h2>Layoffs are one important indicator of the job market's health, and luckily, companies aren't laying off many workers right now.Both layoff rates and initial claims are hovering at or below pre-pandemic levels, Briggs pointed out. Initial claims, or first-time jobless claims filed by individuals seeking unemployment benefits, dropped to a four-month low of 218,000 last week.Low layoffs, in particular, are a positive sign because they help the economy avoid a dangerous feedback loop, Briggs said. Layoffs lead to decreased consumer spending, hurting companies, which leads to even more layoffs.Thankfully, the labor market isn't experiencing this sort of spiral right now. "We're not really seeing any signs on a widespread basis that employers are actually firing workers," Briggs said.On the contrary, consumer spending is quite robust, driven by continued job gains and wage growth, according to Briggs.Wage growth is improving and exceeding inflation this year, posting 3.5% year-over-year growth in August 2024. Real average weekly earnings increased 0.2% from July to August of this year. Briggs predicts that US workers could see 2.0 to 2.5% real income growth in the upcoming year.The US economy is also adding jobs at a steady pace that supports consumer spending, Briggs said. In August, 142,000 jobs were added, which Briggs sees as a healthy monthly increase. He expects the US economy to continue adding jobs at a rate of 140,000 to 150,000 a month. This pace of job growth isn't as aggressive as it was during the post-pandemic hiring frenzy, but that's to be expected as the labor market normalizes, and investors shouldn't take this development as an indicator of recession.Lastly, GDP growth remains strong, setting the stage for a favorable hiring environment. The US economy posted 3% annualized GDP growth in the second quarter of 2024, faster than the 1.4% growth rate in the first quarter and beating Wall Street expectations.Briggs is optimistic about future GDP growth as well. He expects the impacts of the Fed's rate-cutting cycle to start manifesting in the economy relatively quickly, boosting US GDP within the next few quarters.The overall economy has been improving in the past few months in anticipation of rate cuts and will continue to do so, in Briggs' opinion. Most notably, mortgage rates have been decreasing."The changes that we've seen over the last few months point to about a half-point boost to annualized GDP growth over the second half of 2024 and the first half of 2025," Briggs said."There are sectors of the economy that are still highly rate sensitive, and these will have a clear impact on GDP growth," he added.These areas include the housing market, consumer durables, small-cap companies, and industries such as software and pharmaceuticals. With multiple areas of the economy set to benefit from rate cuts, investors should be confident that a soft landing and strong labor market are in the cards.

These 3 indicators are pointing to a healthy labor market similar to the pre-pandemic boom, according to Goldman Sachs

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?

<ul><li><keyword id="719382" type="General" weightage="100" keywordseo="airbnb" source="Orion">Airbnb</keyword> contributed over USD$920 million to India's GDP and supported over 85,000 jobs in FY2023.</li><li>During these 12 months, Airbnb guests spent a total of $815 million in India, more than double of the 2019 levels.</li><li>Report also explores dispersal of tourism away from urban areas, and long-term stays driven by the emergence of flexible work arrangements since the pandemic. </li></ul> Indians are not done with <keyword id="17097331" type="General" weightage="50" keywordseo="revenge-spending" source="Orion">revenge spending</keyword> it seems. And they are travelling like there is no tomorrow. Research done by <keyword id="637984" type="General" weightage="50" keywordseo="oxford-economics" source="Orion">Oxford Economics</keyword> has found that Indians spent a total of $815 mn on stays at Airbnb in the financial year gone by. Not just this, the platform for homestay has contributed over $920 million to India’s Gross Domestic Product and supported over 85,000 Indian jobs over 12 months ending March 2023. The GDP contribution and jobs supported in India has more than doubled since 2019, the year before the COVID-19 pandemic struck resulting in lockdowns and international border restrictions. The report also highlighted the powerful multiplier effect Airbnb guest spending has within local communities. In 2022-23, Airbnb guests spent a total of $815 million in India in areas like purchases on transportation, restaurants, retail stores, and retail stores. The spending has more than doubled from 2019 levels. In India, Airbnb’s presence was the highest in <keyword id="826" type="General" weightage="20" keywordseo="goa" source="Orion">Goa</keyword>, where Airbnb guests spending amounted to almost $190 million, this was followed by Bangalore and Delhi, Mumbai and Manali. It details the significant contribution made by Airbnb guests to domestic tourism across the nation. In 2022-23, domestic Airbnb guest spending totalled $670 million, and accounted for approximately 82% of total Airbnb guest spend in India, around a three-fold increase from 2019. The report also explores two profound changes in travel behaviour since the pandemic: the dispersal of tourism away from urban areas, and long-term stays driven by the emergence of flexible work arrangements. James Lambert, Director for Economic Consulting in Asia for Oxford Economics said, Airbnb has clearly played a major role in the resilience and rebirth of the Indian travel and tourism sector in the wake of the Covid-19 pandemic. “Airbnb has been at the heart of some of the trends reshaping the nation’s travel and tourism industry, including the shift in travel away from cities and towards more rural communities, and the increase in demand for long-stay trips, exemplified by the live and work anywhere phenomenon, Lambert said. Amanpreet Bajaj, Airbnb’s General Manager for India, Southeast Asia, Hong Kong and Taiwan said, “Travel is now more dispersed, and so the economic benefits are being shared across more destinations, enabling a valuable economic contribution to rural and regional areas. This dispersal is being driven by Hosts on Airbnb and in turn creating economic opportunities for various communities. The report explores the twelve months to March 2023 — representing a year since travel restrictions started to be removed across India.

Travel Boom: India spends 2X of pre-pandemic level on Airbnb with Goa leading the charge

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

SBI report deciphers India's GDP surge and economic projections

India's government <keyword id="21309215" type="General" weightage="20" keywordseo="healthcare-spending" source="keywords">healthcare spending</keyword> appears to be on the rise, but a closer look reveals a concerning trend. While the headline figures might suggest an increase, the reality is a steady decline in health expenditure as a proportion of both the <keyword id="19936553" type="General" weightage="20" keywordseo="budget" source="keywords">budget</keyword> and GDP over the past five years (2018-19 to 2023-24). This decline is even starker when adjusted for inflation. In real terms, spending has barely kept pace since 2019-20. As a percentage of the total budget, health spending has shrunk from 2.4% in 2018-19 to just 1.9% in 2023-24. Similarly, the share of GDP allocated to health has fallen from 0.30% to 0.28%, as per a report from the Times of India. <h2>Growing expectations ahead of <keyword id="15478236" type="General" weightage="20" keywordseo="budget-2024" source="Orion">Budget 2024</keyword></h2>As the Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> prepares to present the full budget for the current fiscal on July 23, the expectations from the health sector has only been growing. “The Union Budget 2024-25 is a pivotal moment for India's healthcare sector. Building on the ₹64,180 crores allocated in 2023-24 under the Pradhan Mantri Atmanirbhar Swasth Bharat Yojana, we need enhanced tax incentives and financial support for healthcare startups to catalyze innovation. Significant investments in <keyword id="21226679" type="General" weightage="20" keywordseo="digital-health-infrastructure" source="keywords">digital health infrastructure</keyword>, particularly AI, will improve patient outcomes and operational efficiency,” says Dr Sravani Reddy G, Founder &amp; CEO, Soprav Healthcare Consulting. “Strengthening public-private partnerships will improve healthcare accessibility and quality, leveraging private sector efficiency. Additionally, focused efforts on affordability and access, such as reducing out-of-pocket expenses and improving insurance coverage, are vital for a more equitable healthcare system.” “The healthcare sector in India is on the brink of excellence. There is an increased focus on treating unique patient cases, robotic surgeries, and increasing prominence of AI for accurate diagnosis. To reach the next phase, emphasis must be laid on innovation, research &amp; development, and infrastructure development. These are the foundations for India’s health sector to achieve an international standard of treatment for all,” hopes Joseph Pasangha, Group COO, SPARSH Hospital, Bengaluru. <div type="Article" hostid="261" msid="111730426" title="Pan-India rollout of U-WIN to track routine immunisations likely by Aug end" mstype="2" mssubtype="0"></div> <h2>Health tax not helping enough </h2>This situation is further complicated by the introduction of the <keyword id="22446013" type="General" weightage="20" keywordseo="health-cess" source="keywords">health cess</keyword> in 2018. This tax levy was intended to boost government spending on healthcare, particularly for the underprivileged. However, the collected funds seem to be merely filling the gap created by cuts to regular budgetary allocations for health. In 2022-23, over Rs 18,300 crore of the central government's health spending came from the health cess. Excluding this amount, the actual budgetary allocation for health stands at a concerning Rs 59,840 crore. This is lower than the pre-pandemic level of Rs 66,042 crore allocated in 2019-20, even without adjusting for inflation. <h2>Where's the money going?</h2>The intended purpose of the health cess seems to be falling short. In 2018, health spending accounted for 2.4% of the government's total expenditure. If this ratio had remained constant in 2023-24, the health budget should have been over Rs 1.07 lakh crore. Instead, the revised expenditure, including the health cess, stands at just Rs 83,400 crore. Even the additional allocations for the COVID-19 pandemic (Rs 10,655 crore and Rs 15,955 crore in 2020-21 and 2021-22 respectively) cannot mask the overall decline. When combined with the regular health budget (excluding health cess), the total spending in these years still falls short of what it would have been if the 2.4% share of 2018-19 had been maintained. <h2>More for alternative medicine</h2>While the share allocated to Ayush (Ayurveda, Yoga &amp; Naturopathy, Unani, Siddha and Homeopathy) has seen a significant increase, spending on crucial areas like health research has seen only marginal growth. Additionally, a major portion of research funding goes to the Indian Council of Medical Research, with only a temporary increase during the peak of the pandemic response. The most concerning decrease is in the allocation for health and family welfare, encompassing national programs, the National Health Mission, and health system strengthening. This critical area has seen a substantial decline in its share of both GDP and total budget expenditure, falling from a peak of over 2% in 2017-18 to a mere 1.7% in 2023-24. Excluding the health cess, this figure drops even further to 1.5%. <h2>What this means</h2>This decline in government health spending raises serious concerns about India's commitment to public healthcare, particularly for its most vulnerable populations. Increased investment in health is crucial for a growing nation like India, and a reversal of this downward trend is essential to ensure accessible and quality healthcare for all. The 2024 Interim Health Budget saw a boost in total healthcare expenditure from Rs. 79,221 crore to Rs. 90,171 crore. Experts have opined that The healthcare budget should encompass at least 2.5% of the total budget. But it remains to be seen how the exact picture will turn out to be on July 23. “The 2024-25 budget presents an opportunity to build on past successes while addressing shortcomings, ensuring that India's healthcare system remains resilient, innovative, and patient-centric. This budget can pave the way for a healthier, more equitable future for all," concludes Dr Reddy. (With inputs from TOI) <div type="Article" hostid="261" msid="111689743" title="Union Budget 2024: A handy FAQ guide to decode the upcoming budget" mstype="2" mssubtype="0"></div>

Despite pandemic and growing health scares, India’s budget share for healthcare continues to decline

Mumbai, Stating that the country's external balances are stronger than expected on the back of strong inflows, a Wall Street brokerage on Tuesday projected a much lower current account deficit which is likely to print at 1 per cent for this fiscal, leaving the balance of payment surplus at USD 39 billion. <keyword id="19906485" type="General" weightage="80" keywordseo="goldman-sachs" source="keywords">Goldman Sachs</keyword> in a report said the country's external balances remain favourable with a combination of low CAD, strong capital flows, adequate forex reserves and low external debt. Combined with this, expectations for a weaker dollar due to the likely five <keyword id="19951097" type="General" weightage="80" keywordseo="us-fed" source="keywords">US Fed</keyword> rate cuts this year suggest a "goldilocks" environment for the country's external balances. Accordingly, the Wall Street major has revised upwards its current account deficit (CAD) forecast to 1 per cent of GDP for FY24 from 1.3 per cent earlier, and 1.3 per cent for FY25 from 1.9 per cent earlier, citing a downward revision to their oil price forecast to USD81/barrel in 2024 from above USD90 earlier; and services exports continuing to surprise higher than prior expectations. The brokerage expects robust capital flows in 2024, driven by strong equity portfolio flows as the Fed starts the easing cycle; robust debt inflows as the bonds are included in the JP <keyword id="20036913" type="General" weightage="80" keywordseo="morgan" source="keywords">Morgan</keyword>'s global government bond index from June 2024; and higher FDI inflows with the country continuing to benefit from regional supply chain diversification. These capital inflows should help offset lower net corporate dollar borrowing inflows owing to sizable maturities of earlier loans coming up in 2024, it said, adding overall, the balance of payment surplus should jump to USD 39 billion in FY24 but fall to USD 27 billion in the next fiscal. The country's oil imports fell to USD 164 billion in the January-November 2023 period from USD 189 billion a year ago as oil prices were 18 per cent lower during the period. Similarly, services trade surplus is tracking higher as exports have surprised to the upside, driven by both business and software services. With US growth remaining resilient, the report expects services export to remain strong and services trade balance will print in at USD 158 billion up from USD 148 billion. These two will balance out the rise in gold imports which so far stood at USD39.6 billion and may close the fiscal USD44 billion from USD37 billion in FY23. On the other hand non-oil and non-gold imports are tracking marginally higher than earlier forecasts driven mainly by electronic goods and machinery imports among the major sub-components, and may close the year at USD445 billion from USD440 billion. Net FDI inflows stood at USD17 billion up to October 2023 compared to USD36 billion a year ago, while both equity and debt inflows have picked up in Q3 and at the current run rates they may close at USD28 billion this fiscal up from USD24 billion. The report sees the country's external vulnerabilities remaining low with comfortable import cover at around 11 months, higher than the pre-pandemic average of 9.5 months, and the forex reserves as a share of external debt of 99 per cent is at its highest level in the past 10 years, excluding the pandemic years. On the rupee, the brokerage said it continues to see the rupee as a relatively low-volatility carry currency. But quickly noted that despite this "goldilocks" scenario, the rupee is likely to underperform most EM Asia currencies as they expect the <keyword id="19899808" type="General" weightage="80" keywordseo="rbi" source="keywords">RBI</keyword> to accumulate inflows and build forex reserves at every opportunity. They continue to expect the dollar/rupee pair to hover around 83-82 in the next three to six months, and then appreciate slightly to 81 over the next 12 months.

Goldman Sachs sees India current account deficit falling to 1% of GDP this fiscal

<ul class="summary-list"><li>US <keyword id="12289424" type="UNKNOWN" weightage="60" keywordseo="gross-domestic-product" source="Orion">gross domestic product</keyword> shrank at an annualized rate of 1.4% in the first quarter of 2022.</li><li>Economists expected 1.1% growth. The negative print shows a major slowdown from the fourth quarter's 6.9% pace.</li></ul>The US <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword> contracted for the first time since the early days of the pandemic as historic inflation crashed into the otherwise strong recovery.The country's gross domestic product shrank at an annualized rate of 1.4% through the first quarter of the year, <a href="https://www.bea.gov/news/2022/gross-domestic-product-first-quarter-2022-advance-estimate">the Commerce Department</a> said Thursday morning. Economists surveyed by Bloomberg held a median estimate of 1.1% growth over the period. The print shows the recovery slowing massively from the 6.9% rate seen through the fourth quarter.The report — the first to come after the best growth year since 1984 — underscores the bumpier path ahead for the country's rebound. On one hand, the first months of 2022 saw the Omicron wave crest and then quickly ease. Daily virus infections hit their lowest levels since the summer in March, and while case counts have trended slightly upward, they remain well below the highs seen during the second half of last year.But while the coronavirus's threat has largely faded, inflation took its place as the economy's biggest downside risk. Price growth <a href="https://www.businessinsider.com/inflation-cpi-march-price-growth-report-gas-food-costs-climbing-2022-4">accelerated to a year-over-year pace of 8.5% in March</a>, marking the fastest inflation since 1981 and a sizeable pickup from the rate seen at the end of 2021. Russia's invasion of Ukraine only exacerbated the issue in recent weeks, with supply-chain issues and sanctions driving energy and food costs sharply higher.The bleak <keyword id="11921644" type="UNKNOWN" weightage="60" keywordseo="gdp" source="Orion">GDP</keyword> reading isn't set in stone. The figure will be revised multiple times in the coming months as more data comes in.The bulk of the decline was also powered by somewhat temporary factors. The fourth quarter's booming growth was led by a massive inventory buildup as companies rushed to match supply with demand. Since most of that stockpiling happened in the last months of 2021, businesses dramatically slowed down their inventory investment in the first quarter. That cutback dragged significantly on GDP.Trade also pulled headline growth to lower levels, but that too masks the true nature of the recovery. Economic activity rebounded faster in the US than in most other economies, and Americans continued to <a href="https://www.businessinsider.com/consumer-spending-pce-february-inflation-weakens-americans-shopping-spree-2022-3">spend at a record pace through February</a>. That left imports, which are subtracted from GDP, at elevated levels. Slow recoveries abroad kept demand for US exports fairly subdued, further dampening the growth measure.Government spending weakened as well, extending a trend seen through much of last year. The pullback of massive stimulus and shift toward shrinking the deficit has left the federal government pumping less cash into the economy. That shows up as a negative impact on GDP but doesn't signal a major weakness in the economy, especially after the deployment of $5 trillion in fiscal stimulus earlier in the pandemic."A soft headline Q1 GDP number has been in the cards for some time so this does not change our view on the outlook," Ian Shepherdson, chief economist at Pantheon Macroeconomics, said. "This is noise, not signal. The economy is not falling into recession."Plenty of bright spots remain. Consumer spending grew at an annualized pace of 2.7% through the first quarter, accelerating from the prior quarter's pace. The measure was likely lifted by the drop in coronavirus infections and the reversal of some economic restrictions. It also suggests Americans are still pumping fuel into the economy despite soaring prices. Business investment also grew through the quarter, providing another lift to GDP and suggesting firms aren't bracing for a downturn just yet.Still, the report signals the booming expansion seen through 2021 won't repeat itself. Growth was expected to ease as stimulus effects waned and the country got closer to full health, but the data reveals the slowdown was much more severe than anticipated.

The US economy unexpectedly shrank in the first quarter for the first time since the pandemic crash

<ul class="summary-list"><li>America has gone from a pandemic crash and recession fears to stocks at record highs and an economic boom.</li><li>Lockdowns, wars, shortages, inflation, interest rates, day trading, and AI have all played a role.</li></ul>We've been on a strange journey over the past four years.First there was a deadly pandemic that crashed financial markets and tanked the economy, then spiraling inflation and surging interest rates that squeezed households and roiled industries, and now stock markets at record highs and no recession in sight.So how did we get here — and what lies ahead in 2024 for the US economy?<h2>Going viral</h2>The COVID-19 pandemic struck in early 2020, spurring widespread lockdowns, travel restrictions, and shuttering businesses.Global supply chains <a target="_blank" href="https://www.businessinsider.com/supply-chain-crisis-when-it-will-be-over-end-2021-11">quickly became snarled</a> by mass closures in countries like China, shipping delays, clogged ports, labor shortages, and other headaches caused by the virus and measures to stem its spread.Frightened investors <a target="_blank" href="https://www.businessinsider.com/personal-finance/biggest-stock-market-crashes-in-history">dumped stocks in droves</a>, sending the S&amp;P 500 down by a third in just over a month. The shutdown of large swathes of the economy meant <a target="_blank" href="https://www.businessinsider.com/economic-recession-signals-how-fast-slowdown-hitting-us-coronavirus-pandemic-2020-4">GDP contracted</a> by 8% in a single quarter. Unemployment surged from 3.5% to nearly 15%, and remained above 10% for four consecutive months.The Federal Reserve rushed to shore up the economy by slashing its benchmark interest rate from upwards of 1.5% to between zero and 0.25%. It also ramped up its bond purchases to inject more cash into the economy.Similarly, the US government scrambled to help by mailing stimulus checks to households, offering generous loans and grants to ailing businesses, and rolling out a raft of emergency-spending programs.The panic quickly faded on Wall Street, and institutions raced to scoop up bargains. There was also an <a target="_blank" href="https://markets.businessinsider.com/news/stocks/mark-cuban-warns-day-trading-boom-similar-dot-com-bubble-2020-6-1029297045">explosion in day trading</a> that continued throughout 2021, fueled by people being stuck at home with limited leisure options but stimulus checks to spend, along with the rise of zero-commission trading apps such as Robinhood and forums including WallStreetBets that encouraged risky trading for the entertainment value.The upshot was that casual investors flooded into meme stocks, cryptocurrencies, special-purpose acquisition companies (SPACs), and other highly speculative assets.Some wanted to make a quick buck. Others were eager to thumb their noses at hedge funds and the like, or <a target="_blank" href="https://www.businessinsider.com/gamestop-struggling-pandemic-stock-market-video-games-2021-1">ride to the rescue</a> of GameStop, AMC Entertainment, and other heavily shorted companies they remembered fondly from their childhoods.<div type="image" title="AMC and GameStop" height="1474" width="2846" msid="107852198" hostid="261"></div>Many Americans also socked away money during the pandemic, as they saved on expenses like travel and live entertainment.<h2>War, prices, and rates</h2>Fast forward to the spring of 2022, and Russia's invasion of Ukraine delivered a fresh shock to global supply chains, causing essentials like <a target="_blank" href="https://www.businessinsider.com/war-in-ukraine-vladimir-putin-russia-black-sea-grain-initiative-2023-7">food and energy</a> to surge in price.Stimulus-fueled demand, combined with pandemic and war-related supply disruptions, caused inflation to spike to a 40-year high of 9.1% in June that year.The Fed swiftly raised interest rates to rein in the price growth, lifting them from virtually zero to upward of 5% in under 18 months, and hasn't touched them since.Higher rates typically curb spending, investing, and hiring, which can lead to unemployment jumping and the economy slowing so much that a recession takes hold.They also tend to pull down the prices of risky assets like stocks and real estate. That's because they bolster the ultra-safe yields from Treasury bonds and savings accounts, leading investors to swap potential returns for a guaranteed payday.<h2>Financial pain builds</h2>American households faced a <a target="_blank" href="https://markets.businessinsider.com/news/stocks/big-short-michael-burry-jpmorgan-consumer-inflation-rates-banking-crisis-2023-4">double whammy</a> of soaring food, fuel, and housing costs as inflation took off, along with surging monthly payments on their mortgages, car loans, credit cards, and other debts as rates rose.As a result, they began <a target="_blank" href="https://markets.businessinsider.com/news/stocks/big-short-michael-burry-economy-consumer-spending-savings-debt-recession-2022-6">cracking open</a> their pandemic nest eggs, racking up record amounts of credit-card debt, and putting away less money each month.That trend threatened to result in consumers running short of cash and spending less on goods and services. At the same time, companies were dealing with larger interest payments on their debts, cost inflation, labor shortages, and other problems.The housing market also <a target="_blank" href="https://markets.businessinsider.com/news/commodities/housing-market-explained-mortgage-rates-fed-inventory-home-prices-house-2023-6">ground to a halt</a> last year after mortgage rates jumped above 7% for the first time in more than two decades. Prospective sellers held off on listing their homes as they didn't want to give up the low rates they'd locked in. Potential buyers balked at paying top dollar for a home and coughing up a much larger monthly payment than they expected.Silicon Valley Bank was <a target="_blank" href="https://www.businessinsider.com/silicon-valley-bank-failure-what-happened-bank-run-explained-2023-3">one of several smaller lenders</a> last spring to be caught off-guard by the rate hikes, which triggered large paper losses in its portfolio of bonds and mortgages.Depositors, spooked by the declines and fearful of losing their money, frantically withdrew their cash, causing the banks to collapse and prompting the federal government to take them over and guarantee their deposits.Higher rates, combined with the shift to remote work, have also hammered the value of offices and other commercial real estate.The industry now <a target="_blank" href="https://www.businessinsider.com/commercial-real-estate-big-trouble-crash-bank-crisis-2024-2">faces a triple threat</a> of declining property values, a credit crunch as embattled regional banks pull back from financing the sector, and onerous interest payments for debt-reliant developers poised to refinance at much higher rates.<h2>Defying the doomsayers</h2>Despite all those headwinds, the US economy grew by a solid 3.3% last quarter on an annualized basis, <a target="_blank" href="https://www.businessinsider.com/jobs-labor-market-unemployment-rate-wage-growth-january-economy-2024-2">unemployment</a> remained at a historically low 3.7% in January, and inflation has dropped below 4% in recent months.Consumer spending and company profits have also held up, defying concerns of a demand slump and an earnings recession.There's also widespread excitement about AI's potential to <a target="_blank" href="https://www.businessinsider.com/ai-reduce-employee-headcount-this-year-ceo-study-jobcuts-efficiency-2024-1">supercharge productivity</a>. In addition, the Fed has signaled it will pivot to cutting rates this year, easing pressure on sectors such as banking and real estate while also reducing the risk of a recession.Against that <a target="_blank" href="https://www.businessinsider.com/recession-outlook-economy-inflation-labor-market-gdp-growth-housing-construction-2024-2">rosy backdrop</a>, it's little wonder that the S&amp;P 500 has climbed 5% this year to a record high of over 5,000 points, after soaring 24% in 2023.It's still unclear why exactly America is seemingly thriving, when other countries like the UK are facing stickier inflation and have <a target="_blank" href="https://www.businessinsider.com/recession-outlook-japan-uk-low-growth-yen-pound-rishi-sunak-2024-2">slumped into recession</a>.The surge in prices may <a target="_blank" href="https://www.businessinsider.com/inflation-stocks-recession-paul-krugman-us-economy-outlook-immaculate-disinflation-2023-11">truly have been transitory</a>, a product of the pandemic driving up demand for goods at a time when supply chains couldn't deliver them.Or inflation might be the result of growth in the money supply, and its decline last year has <a target="_blank" href="https://markets.businessinsider.com/news/stocks/steve-hanke-stock-market-outlook-recession-inflation-fed-house-prices-2023-8">set the stage for an economic downturn</a>.<a target="_blank" href="https://markets.businessinsider.com/news/stocks/stocks-crypto-house-prices-dent-market-outlook-bubble-crash-recession-2023-12?utm_campaign=markets-sf&amp;utm_source=twitter&amp;utm_medium=social">Massive government outlays</a> in the form of stimulus checks, student-debt relief, and infrastructure and technology programs may have propped up growth and employment, forestalling a recession.Advances in AI may have multiplied the value of the <a target="_blank" href="https://markets.businessinsider.com/news/stocks/tech-stocks-ai-bubble-dotcom-crash-magnificent-7-nvidia-microsoft-2024-2">"Magnificent Seven"</a> stocks and pulled the entire market higher, or the tech might be overblown and a <a target="_blank" href="https://markets.businessinsider.com/news/stocks/jeremy-grantham-stocks-real-estate-ai-bubble-fed-economy-quotes-2024-2">bubble destined to burst</a>.In short, everything might be hunky-dory and the good times will just keep rolling. Alternatively, years of <a target="_blank" href="https://markets.businessinsider.com/news/stocks/jeremy-grantham-stocks-real-estate-ai-bubble-fed-economy-quotes-2024-2">hype, speculation and irrational exuberance</a> combine with unsustainable amounts of spending and borrowing in both the private and public sectors to <a target="_blank" href="https://www.businessinsider.com/recession-outlook-us-economy-job-market-unemployment-soft-landing-citi-2024-2">doom</a> the stock market and economy to disaster.While nobody can be certain what's coming, understanding how we got here may help us understand the potential risks ahead.

The economy's gone from strength to strength after the pandemic &mdash; but no one quite knows why, or what comes next

<ul class="summary-list"><li>Credit card debt has reached record highs after years of pandemic-era spending.</li><li>Credit card debt fell after the start of the pandemic but has consistently risen since mid-2021.</li></ul>Americans' cash reserves have experienced a <a href="https://www.businessinsider.com/gen-z-millennials-financial-futures-jobs-economy-money-pandemic-recession-2023-4">boom bust cycle</a> in the last few years, and the latest data spells bad news. Americans now hold a record level of credit card debt, according to recent data from the <a href="https://fred.stlouisfed.org/series/CCLACBW027SBOG#" target="_blank" rel="noopener">Federal Reserve</a>. It comes as they see their <a href="https://www.businessinsider.com/people-least-amount-of-money-on-hand-since-pandemic-2023-7">pandemic savings and cushions depleted</a>, and as the labor market cools from its red-hot post-vaccine highs.It shows just how much direct stimulus spending bolstered the economy and created a group of workers accustomed to support that likely won't come back — and it may spell even further economic doom as <a href="https://www.businessinsider.com/how-much-will-student-loan-payments-be-debt-relief-borrowers-2023-7">student loan bills</a> get piled on.<a href="https://www.businessinsider.com/personal-finance/consolidate-credit-card-debt">Credit card debt</a> saw a big dip after the pandemic's onset and stayed low in the post-vaccine months, fueled by stimulus payments and enhanced employment benefits. At the same time, the personal savings rate soared, with American households able to save up $2.3 trillion from the first quarter of 2020 through the third quarter of 2021, according to a <a href="https://www.federalreserve.gov/econres/notes/feds-notes/excess-savings-during-the-covid-19-pandemic-20221021.html" target="_blank" rel="noopener">Federal Reserve analysis</a>.Recent data from Credit Karma shows Gen Z and millennials have seen their credit card debt rise significantly in the second quarter of this year. Gen Z credit card debt rose 4.2% to levels exceeding $3,300 on average, while millennials increased their credit card debt by 2.5% to an average of nearly $7,000.But those reserves are tapped out. Americans' cash balances, which saw a major bump from pandemic-era stimulus and savings, <a href="https://www.businessinsider.com/people-least-amount-of-money-on-hand-since-pandemic-2023-7">have reached their lowest levels since April 2020</a>. While bank accounts might look like they did pre-pandemic, the prices of everything else do not, as inflation continues to <a href="https://www.businessinsider.com/wage-growth-faster-than-inflation-first-time-2-years-2023-6">mostly eat up wage gains</a> and hit Americans' wallets.Just take a look at how much credit card debt everyone is accruing. Consumer loans, made up <a href="https://www.fdic.gov/analysis/quarterly-banking-profile/fdic-quarterly/2022-vol16-1/article1.pdf" target="_blank" rel="noopener">mostly of credit card debt</a>, have risen consistently from a pandemic low in April 2021. The most recent data shows loans exceeding $994 billion, up from April 2021's low of around $736 billion.The student-loan payment pause led to a surge in other forms of consumer debt. According to the <a href="https://www.consumerfinance.gov/about-us/blog/office-of-research-blog-update-on-student-loan-borrowers-as-payment-suspension-set-to-expire/" target="_blank" rel="noopener">Consumer Financial Protection Bureau</a>, nearly 8% of student loan borrowers are behind on other payments, a higher percentage than pre-pandemic times. This may worsen once the moratorium on payments is lifted in September.For the first quarter of 2023, household debt was also on the rise, given higher student loan, mortgage, and auto balances. Total household debt <a href="https://www.newyorkfed.org/microeconomics/hhdc" target="_blank" rel="noopener">increased 0.9% for the quarter</a> to just over $17 billion, according to the Quarterly Report on Household Debt and Credit.It's another sign of how the pandemic, and its cash-fueled economic recovery, have completely changed the economy's frame of reference."The professional economy watchers and analysts, Fed and elsewhere, are having this existential crisis of what is good, what is bad, and what can we know about the future?" Aaron Terrazas, chief economist at Glassdoor, <a href="https://www.businessinsider.com/economy-explained-feels-bad-inflation-recession-job-market-pandemic-recovery-2023-7">previously told Insider</a>. This data all <a href="https://www.businessinsider.com/how-is-us-economy-recession-outlook-2023-6">shows a disconnect</a> between Americans running out of money and the broader economy. Even with wages trending higher, inflation coming down, and GDP expected to grow for the quarter, many Americans are still struggling to pay down their bills and maintain savings. Consumer confidence levels are at two-year highs, but paying off credit card debt remains a continued stressor.If the pandemic was a great economic reckoning, and the year or so after marked by workers demanding better, the latest iteration of the economy might be best described as grumpy: Even strong economic data isn't enough to keep Americans above water. After all, a strong jobs report or growing GDP can't be cashed in when you're paying for inflation-driven markups at the grocery store.Have you been struggling to pay off your credit card debt? Contact these reporters at <a href="mailto:jkaplan@insider.com" target="_blank" rel="noopener">jkaplan@insider.com</a> and <a href="mailto:nsheidlower@insider.com" target="_blank" rel="noopener">nsheidlower@insider.com</a>.

Americans got used to spending big during the pandemic. Now they're running out of money and racking up record credit card debt.

<ul><li>The idea of K-shaped recovery post-pandemic in India is flawed and prejudiced, says a report by <keyword id="20112035" type="General" weightage="20" keywordseo="sbi-research" source="keywords">SBI Research</keyword>.</li><li>Economist <keyword id="20112034" type="General" weightage="20" keywordseo="peter-atwatera" source="keywords">Peter Atwatera</keyword> defines K-shaped recovery as - stacked inequity on one side and stacked privilege on the other.</li><li>India’s lower income groups are migrating to higher income groups, and their consumption patterns are changing.</li><li>The number of ultra rich has gone up but their combined income has not increased greatly between FY14-FY21. </li></ul>India’s income inequality has been debated since times immemorial. After the pandemic, the term K-shaped recovery, which essentially means an uneven recovery riding on certain sectors, has come to the fore. However, SBI Research doesn't agree with the theory and says that the current economic ‘shift’ has more to do with India’s remarkable ascendance with changing consumer preferences in purchases, savings and more. “The oft repeated conundrum debating a K-shaped recovery post-pandemic seems at best flawed, prejudiced, ill-concocted and fanning interests of select quarters to whom India’s remarkable ascendance, signaling more the renaissance of the new global south, is quite unpalatable,” the report said. Economist Peter Atwatera popularised the term K-shaped recovery. He describes it as "stacked inequity on one side and stacked privilege on the other”. But that’s not what’s happening in India, instead there has been a swelling of the middle class and gradual shifting of income groups. Rise of the middle classes There has been a gradual shift in people from the lowest income group, SBI Research says. It cites the income tax return filing data which shows that 36.3% of people who were earning less than ₹3.5 lakh in FY14 have left the income group to migrate upwards as of FY21. “A comparison of disparity in income during FY14 and FY21 shows that there is a clear rightward shift in the income distribution curve signifying people in lower income brackets are increasing their income to converge towards their share in population,” the report says. Shifting incomes of 36.3% people earning &gt;₹3.5 lakh from FY14 to FY21 <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% of people </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Shift to income group </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">15.3% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> ₹3.5-5 lakh </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">15.3% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹5-10 lakh </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.2% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹10-20 lakh </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹20 lakh and upwards </td></tr></tbody></table>Source: SBI Research On the top end, the number of rich individuals increased substantially — but their combined income hasn’t gone up substantially. In fact, even at the top-end, wealth has been distributed fairly well. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">No of individuals earning over ₹100 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Combined wealth </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY14 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹29,290 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY21 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">136 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹34,301 crore </td></tr></tbody></table> In fact the percentage contribution of the ultra-rich in the total wealth has come down. In FY14, combined income of over ₹100 crore contributed to 1.64% of total income. As their number swelled to 136 in FY21, their share in total income fell to 0.77%. “Therefore, growth is seen in all income classes but it’s skewedness has been decreasing with convergence of income towards the middle from both top as well as bottom,” said SBI Research. <keyword id="19934037" type="General" weightage="20" keywordseo="iphones" source="keywords">iPhones</keyword> and India’s consumption story India has always been known as a price sensitive market, but that’s changing thanks to its ‘young’ demographics. The rise in income is shifting the goalpost for affordability, combined with change in lifestyle preferences. This is also fuelled by online marketplaces which evolved into ‘a wish fulfilling wand’, offering brands (and their alternatives) at hefty discounts, the report says. A very good case study to this theory is Apple’s keen interest in the market. Its CEO <keyword id="19954680" type="General" weightage="20" keywordseo="tim-cook" source="keywords">Tim Cook</keyword> labels it an ‘extraordinary market’. “An interesting case affirming India’s rising middle class in flux could be iPhone sales. The company has more than 50% share in the smartphone price category above ₹50,000, aiming to sell around 9 million iPhones this year, riding the premiumization wave enveloping the consumer psyche, a harbinger of good times on the roll,” the report says. Do duni chaar: Middle class adds more wheels The report believes that <keyword id="19907310" type="General" weightage="20" keywordseo="digital-india" source="keywords">Digital India</keyword> with its direct benefits transferred to beneficiaries’ accounts and ‘the multiverse of welfare schemes’ have changed the way Indians spend and consume. A new India’s rural economic growth cannot be measured by ‘old proxies’ like two-wheeler sales and more. The fall in 2-wheelers has long been associated with rural distress but that’s no more the case. It quotes FY19 data wherein two-wheeler sales hit a high of around 2.12 crore units – when agri GDP slouched to 2.1% and rainfall deficiency spiked. Like in the case of devices, here too, there is a premiumization trend – that’s making people buy more wheels as they buy their vehicles. That indicates a transition, the report says. “People are buying more expensive motorcycles and cars than what they’ve bought earlier. And, two wheelers are being considered as giffen goods with the rise of income, and people are substituting two wheelers for the four wheelers,” SBI Research says.

India’s post-pandemic rise not uneven but shows the rise of the middle class, says SBI report

<ul class="summary-list"><li>America is reopening, and coming out of its pandemic shell could mean an <a href="https://www.businessinsider.com/economic-outlook-stimulus-vaccines-gdp-growth-strongest-decades-fed-williams-2021-2">economic boom</a>. It's a glow-up.</li><li>They're already spending on outdoor activities, transit, restaurants, clothes, and beauty.</li><li>But America will also look different, and spending in other areas is weak. We don't know what will emerge.</li></ul>America is getting ready for its post-pandemic glow-up.Peak sweatpant has passed and <a href="https://www.businessinsider.com/peak-sweatpant-sweatpants-sales-pandemic-high-heels-retail-trends-2021-4">high heels are hot again</a>, in the ultimate symbol of an <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> ready to let loose. Americans are booking beauty services, buying going-out clothes again, and readying for a "<a href="https://www.insider.com/hot-vaxx-summer-pandemic-horniness-is-coming-blissful-release-2021-3#:~:text='Hot%20Vax%20Summer'%20Is%20Coming,interaction%2C%20or%20dismiss%20a%20notification.ication.">hot vax summer</a>" as they emerge from lockdown looking and feeling different than they entered, helping the economy roar back to life in the process.It's the result of vaccination rates <a href="https://www.businessinsider.com/hitting-latest-vaccine-milestone-biden-pushes-shots-for-all-2021-4">revving up</a>, big cities <a href="https://www.businessinsider.com/nyc-full-reopening-july-1-ready-bill-de-blasio-2021-4">reopening</a>, and Americans sitting on a ton of cash. Between three <keyword id="45304" type="COMPANY" weightage="60" keywordseo="Stimulus">stimulus</keyword> checks and the decline in discretionary spending that accompanied a pandemic shutdown, Americans were holding <a href="https://markets.businessinsider.com/news/stocks/us-excess-savings-coronavirus-pandemic-power-economy-recovery-moodys-2021-4-1030318905">$2.6 trillion</a> in excess <keyword id="25450" type="ORGANIZATION" weightage="60" keywordseo="savings">savings</keyword> as of mid-April, per Moody's Analytics.And that's why so many economists are predicting that a lockdown lift will see the <a href="https://www.businessinsider.com/economic-outlook-stimulus-vaccines-gdp-growth-strongest-decades-fed-williams-2021-2">biggest boomtime</a> in a generation, potentially ushering in a <a href="https://www.businessinsider.com/us-economic-outlook-2020s-new-era-stimulus-vaccines-remote-work-2021-2">new era in the US economy</a>. Moody's Analytics expects the US economy to grow 6.4% in 2021 after <a href="https://www.businessinsider.com/us-economy-shrank-35-in-2020-after-growing-4-last-quarter-2021-1?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">shrinking 3.5% in 2020</a>. But to power such an economic transformation, Americans need to keep spending. BofA's head of North America Economics, Ethan Harris, wrote in March that the US' economic fate will depend on whether Americans view their excess savings as wealth or deferred income. His team sees the savings being treated as the latter, which should "help support exceptional growth this year in addition to the tailwinds from fiscal stimulus and an improving virus picture."Mark Zandi, chief economist at Moody's Analytics, agrees. "An unleashing of significant pent-up demand and overflowing excess saving will drive a surge in <keyword id="110880" type="PERSON" weightage="60" keywordseo="Consumer-spending">consumer spending</keyword> across the globe as countries approach herd immunity and open up," he wrote in a note. He sees 20% of excess savings being spent in 2021, and another 20% next year. Credit card spending is already up, but it's just the beginning. Inflation, unequal savings distribution, and an uneven economic recovery may prove to be challenges in spending enough to fuel an economic boom.<h2>Spending on outdoor activities and a 'hot vax summer'</h2>"The snooze is over," wrote BofA's Michelle Meyer, head of US economics, in a note published on Thursday. BofA's card spending showed a massive uptick in consumer spending for the week, up 45% year-over-year and by 20% over two years previous. The third stimulus has already impacted Americans' bank accounts, per <a href="https://www.bea.gov/news/2021/personal-income-and-outlays-march-2021" target="_blank" rel="noopener">Bureau of Economic Analysis</a> data. As <a href="https://www.businessinsider.com/personal-income-march-spending-stimulus-economy-covid-checks-americans-biden-2021-4">incomes climbed by 21.1%</a> last March - a record monthly income leap dating since 1946 - consumer spending rose with it, increasing by 4.2%. Americans haven't spent that much since June. Total consumer spending, not adjusted for inflation, has now exceeded pre-pandemic levels.In consumer spending, still leading the way is <a href="https://www.businessinsider.com/wealthy-americans-doing-hobbies-alone-already-reshaping-economy-2020-6">solitary leisure</a> - solo activities that Americans turned to in the social-distancing era as previous forms of leisure, especially hospitality and entertainment, fell off dramatically. Spending on sporting goods such as golf, campground, and bike equipment, is continuing its momentum with activity above pre-pandemic norms, per BofA. But we're also starting to see a resurgence in the activities of pre-pandemic yore. Spending on transit, restaurants and bars, department stores, and clothing have all increased by over 100% on a daily basis over the past 10 days, per BofA.<div type="image" title="haircut" height="1666" width="2222" msid="82357113" hostid="261"></div>Retailers are gearing up for a "peacocking effect" and dress sales on the rise, while jeans are making a comeback, <a href="https://www.businessinsider.com/going-out-clothes-sales-rising-vaccines-retailers-vaccine-summer-2021-4">Insider's Avery Hartmans reported</a>. Blazers, stylish tops, and brightly colored sandals are all <a href="https://www.washingtonpost.com/business/2021/03/18/dresses-jeans-suits-shopping-again/">seeing signs of life</a>. Retail CEOs everywhere from <a href="https://www.businessinsider.com/gap-ceo-expects-sales-increase-after-covid-pandemic-2021-3">Gap</a> to <a href="https://finance.yahoo.com/news/urban-outfitters-ceo-sees-hope-220547599.html">Urban Outfitters</a> have noted signs of an incoming retail boon, with the latter already seeing an uptick in purchases of <a href="https://finance.yahoo.com/news/urban-outfitters-ceo-sees-hope-220547599.html">going-out clothes</a>.The post-pandemic beauty boom has also arrived, as <a href="https://www.theatlantic.com/health/archive/2021/04/pandemic-beauty-salon-spa-botox-appointments/618520/">The Atlantic's Amanda Mull reported</a>. From eyebrow threading and hairstyling to mani-pedis and cosmetic injections, she wrote, people are booking up beauty services for their own personal glow-up. Beauty sales increased by 31% for for the week ending April 24, per BofA, compared to 2019.The start of this spending is already making a difference. <a href="https://www.businessinsider.com/us-q1-gdp-economic-output-recovery-reopening-stimulus-vaccination-recession-2021-4">GDP grew at a 6.4% annualized rate</a> in the first quarter, the Commerce Department estimated on a preliminary basis.Economists have thus upped their predictions for economic growth every month of the year, <a href="https://www.bloomberg.com/news/articles/2021-04-09/u-s-growth-expectations-keep-mounting-with-bigger-tailwind?sref=BLKWHazc">according to Bloomberg's latest monthly survey</a>, forecasting an annualized pace of 8.1% <keyword id="35050" type="CITY" weightage="60" keywordseo="gdp">GDP</keyword> growth in the second quarter.<h2>An unequal recovery and unequal savings</h2>While Americans have already begun swiping their cards, there are still holes in the economy to fill and challenges to overcome.Entertainment and airline spending are improving, but still weak, per BofA. More Americans <a href="https://www.businessinsider.com/travel-returning-boom-airlines-hotels-restaurants-spending-vacation-2021-3#especially-the-elderly-cohort-which-has-already-been-taking-flight-2">intend to travel</a> as the weeks go by, with some already booking vacation rentals and hotels, and airlines just saw their busiest weekend since pre-pandemic, but travel's comeback is a <a href="https://www.businessinsider.com/travel-returning-boom-airlines-hotels-restaurants-spending-vacation-2021-3#especially-the-elderly-cohort-which-has-already-been-taking-flight-2">gradual one</a>.That might partly be because the economic recovery across America hasn't been uniform. BofA spending <keyword id="6357018" type="DEFINITION" weightage="60" keywordseo="Analysis">analysis</keyword> finds the South and parts of Midwest are faring better economically than the West and the Northeast. That's likely because the latter regions had longer lockdowns and a slower easing of restrictions in an attempt to curb the spread of the coronavirus.Also <a href="https://www.businessinsider.com/pandemic-widened-millennial-wealth-gap-economic-inequality-rich-poor-henry-2021-1?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">unequal</a> is the share of savings built up during the pandemic. Zandi said in the Moody's note that this would limit an even bigger boom in spending. "Much of the excess saving has been by high-income, high-net-worth households who are likely to treat the saving more like wealth than income, and will thus spend much of less it, at least quickly," he wrote.<div type="image" title="thanksgiving travel 2020" height="1447" width="1930" msid="82357115" hostid="261"></div>Nearly two-thirds of the excess savings in the US is by households in the top 10% of the income distribution, per Moody's data, and three-quarters is by those in the richest 20%.Consumer spending accounts for 70% of the American economy, and half of that is from the top 10% of American households, per estimates from Goldman Sachs and Deutsche Bank, respectively. That means about one-third of US GDP comes from spending by the top 10%. In other words, the US needs spending from wealthy households the most.But there's a side effect that may come with unleashing pent-up demand: inflation. While experts don't think the economy will <a href="https://www.businessinsider.com/us-economy-rebound-goods-commodities-services-more-expensive-inflation-stimulus-2021-2#:~:text=It's%20a%20crucial%20next%20step%20for%20the%20US%20economic%20recovery.&amp;text=The%20US%20economy%20is%20headed,things%20more%20expensive%20for%20Americans.&amp;text=This%20is%20good%3B%20inflation%20like,and%20a%20healthy%20economic%20recovery.%20recovery.">overheat like it did in the 1970s</a>, some goods and services have begun to get <a href="https://www.businessinsider.com/everything-that-could-get-more-expensive-in-2021-inflation-2021-3">more expensive</a> amid the <a href="https://www.businessinsider.com/more-expensive-goods-supply-shortage-congested-shipping-ports-texas-freeze-2021-3">supply shortages</a> that have come with reopening. The unpredictability of inflation could cause consumers to curb their spending.<h2>A world with baggy jeans and remote work</h2>In a post-pandemic world, though, America will look a little different. The point of a glow-up, after all, is transformation.And while Americans whiled away their quarantine days <a href="https://www.businessinsider.com/how-pandemic-shaped-millennials-adulthood-growing-up-2021-3">baking bread and reorganizing their closets</a>, new trends emerged. Clothes are <a href="https://www.usatoday.com/restricted/?return=https%3A%2F%2Fwww.usatoday.com%2Fin-depth%2Flife%2Ffashion%2F2021%2F04%2F18%2Fpost-pandemic-fashion-sweatpants-brighter-clothes-comfortable-shoes%2F7220342002%2F">brighter</a>, wide-legged jeans have <a href="https://www.refinery29.com/en-us/2021/02/10306887/tiktok-skinny-jeans-uncool-millennials">replaced skinny jeans</a>, side parts are <a href="https://www.thecut.com/2021/02/gen-z-middle-part-tiktok.html">no longer cool</a>, and the "ugly fashion" movement has seen its <a href="https://www.businessinsider.com/ugly-clothes-are-in-style-2018-2">pre-pandemic popularity</a> accelerate as shoppers increasingly purchase things like <a href="https://www.businessinsider.com/walking-shoes-millennial-gen-z-status-symbol-covid-wfh-economy-2021-3">grandpa shoes</a> and <a href="https://www.gq.com/story/crocs-are-grails-sorry">Crocs</a>Urban areas too, will look a little different. While experts and the data are pointing to big cities like New York <a href="https://www.businessinsider.com/new-york-city-exodus-florida-temporary-move-migration-manhattan-brooklyn-2021-4">making a comeback</a>, they will likely function in new ways. Urban theorist Richard Florida <a href="https://www.businessinsider.com/us-economic-outlook-2020s-new-era-stimulus-vaccines-remote-work-2021-2">previously told Insider</a> he thinks major cities will be reshaped and revived by a newfound focus on interpersonal interaction that facilitates creativity and spontaneity. He said the community or neighborhood itself will take on more of the functions of an office.The work-from-home revolution could bolster new cities' real-estate <keyword id="31671" type="CITY" weightage="60" keywordseo="markets">markets</keyword>, as more broadly shared prosperity counteracts decades of increasing regional inequality, but spending within cities themselves could suffer. For instance, economists estimate spending in downtown areas will be <a href="https://www.businessinsider.com/economic-outlook-consumer-spending-drop-cities-work-home-commute-study-2021-4">10% depressed</a> - or more in the case of Manhattan - because of the remote-working revolution. So the fashions on the street will look different, and the cities will probably be a bit emptier.People are also buying more stuff for inside the home. Spending in home categories was up 50.3% over 2019 for the week ending April 24, according to BofA. Americans have learned to spend in a more private way during a year inside. The glow-up is on, but Americans will have to keep spending for a truly impressive makeover.

You Searched For "gdp during pandemic" and got 12 results

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