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India is poised to remain the fastest-growing major economy in 2024-25, Chief Economic Adviser V Anantha Nageswaran said in a press conference after the tabling of the <keyword id="20613906" type="General" weightage="20" keywordseo="economic-survey" source="keywords">Economic Survey</keyword> in the Parliament on Monday. The Economic Survey tabled today projected India to grow at 6.5-7.0 per cent in 2024-25. Global institutions, including <keyword id="19896779" type="General" weightage="20" keywordseo="IMF" source="keywords" meta.keywordsubtype="org" meta.entityname="IMF" meta.hostid="261" meta.entityid="IMF">IMF</keyword>, OECD, World Bank, S&amp;P, ADB, and Fitch, have projected India to grow in a range of 6.6-7.2 per cent. The International Monetary Fund (IMF), in its latest outlook, has raised India's growth projections for 2024 from 6.8 per cent earlier to 7 per cent, with the country maintaining the fastest-growing status in emerging markets and developing economies. According to official data of the Indian government, the country's GDP grew at an impressive 8.2 per cent during the financial year 2023-24. India's economy grew 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22 respectively. Further, the CEA in his press conference projected that India's <keyword id="20089672" type="General" weightage="20" keywordseo="per-capita-income" source="keywords">per capita income</keyword> is expected to increase from around Rs 2 lakh in 2022-23 to Rs 14.9 lakh in 2046-47. Further, CEA said <keyword id="20751315" type="General" weightage="20" keywordseo="household-savings" source="keywords">household savings</keyword> of Indians in physical assets have been increasing over the past three financial years through 2023-24. The CEA, addressing the press conference, said household savings in physical assets rose from 8 per cent in 2020-21 to 12.9 per cent in 2022-23. "Households are not in distress, they are investing in <keyword id="20792385" type="General" weightage="20" keywordseo="financial-assets" source="keywords">financial assets</keyword> that have done very well. Financial assets of households are not marked to market so households are doing quite well in the aggregate," he said. India needs both banks and capital markets to provide the required finances sourced from a sustained high level of household savings, according to the Survey. <keyword id="20385790" type="General" weightage="20" keywordseo="Union-Finance-Minister" source="keywords">Union Finance Minister</keyword> Nirmala Sitharaman on Monday tabled the economic survey in Parliament, a day ahead of the full Budget presentation for 2024-25. The Economic Survey document, prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance and formulated under the supervision of the chief economic adviser, gives insights into the state of the economy and various indicators of 2023-24 (April-March) and some outlook for the current year. The Economy Survey document also gave some idea about the tone and texture of the actual Budget for 2024-25, to be presented on Tuesday. (ANI)

India to remain fastest growing major economy in 2024-25, says CEA Nageswaran

<keyword id="20207838" type="General" weightage="20" keywordseo="dsp-mutual-fund" source="keywords">DSP Mutual Fund</keyword>'s September 2024 Netra report credits <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s strong economic recovery to increased fiscal expenditure. The report, which tracks current economic trends and market insights through various charts, emphasizes the need for the private corporate sector and households to play a larger role in sustaining the ongoing growth momentum. Netra also pointed out an unsettling calm in the markets, with the Nifty 50 TRI index maintaining an impressive 53-month streak without a 5% decline and 13 years without a drop greater than 10%. Sahil Kapoor, Head of Products and Market Strategist, DSP Mutual Fund, said, "The calm in the markets, marked by an unnerving lack of volatility, is a double-edged sword. While it provides a sense of stability, it also masks underlying risks that could surface unexpectedly, catching investors off guard. To ensure a sustainable recovery, there is a need for the private sector and households to take the lead, transforming fiscal stimulus into lasting economic growth." However, the report notes a shift in market dynamics, with the momentum factor, which has outperformed since the COVID-19 bottom, beginning to lose its dominance. At the same time, the quality factor, which had underperformed over the last four years, is now seeing a resurgence, potentially indicating a change in market leadership that could favour quality-orientated funds, both active and passive. The report highlights the critical role government spending has played in the recovery, with a focus on capital investments crucial for future growth. However, contributions from the private corporate sector and households have lagged. It also draws attention to a slowdown in India's per capita consumption, approaching lows seen in previous cycles. Given that consumption accounts for around 60% of GDP, it is vital that this sector grows at a rate exceeding GDP growth to stimulate private capital expenditure. India's <keyword id="487578" type="General" weightage="20" keywordseo="tax-collections" source="Orion">tax collections</keyword> have demonstrated robust growth, with gross tax revenue showing a five-year compound annual growth rate (CAGR) of 14 %. This growth, largely driven by <keyword id="6354751" type="General" weightage="20" keywordseo="income-tax" source="Orion">income tax</keyword>, indicates a rising dependency on capital gains and stock market performance, introducing new vulnerabilities to the economy. The banking and financial services sector (<keyword id="19910880" type="General" weightage="20" keywordseo="bfsi" source="keywords">BFSI</keyword>) has emerged as a key driver of market earnings, recording a 12 % increase in profit after tax (PAT) growth, significantly outpacing the 4.6 % growth observed in non-BFSI Nifty 50 companies. This disparity underscores the sector's importance in India's economic story and highlights promising investment opportunities.

India's strong economic recovery is led by fiscal expenditure: DSP MF

<ul><li>Adani said within the next decade, India will start adding $1 trillion to its GDP every 12-18 months. </li><li>India’s median age would be just 38 years even in 2050, and over this period the population would grow by 15% to 1.6 bn but the per capita income would accelerate by 700% approximately to $16,000. </li><li>According to the world’s third richest man, the style of capitalism that drives growth for the sake of growth and ignores the social fabric of the society is rightfully facing its greatest pushback ever. </li></ul>Billionaire Gautam Adani, founder and chairman of the <keyword id="6367820" type="General" weightage="20" keywordseo="Adani-group" source="Orion">Adani Group</keyword>, made a strong pitch for India in a multipolar world, where globalisation and the <keyword id="15561137" type="General" weightage="20" keywordseo="old-style-of-capitalism" source="Orion">old style of capitalism</keyword> was facing its greatest pushback ever. In his keynote address, Adani said that given the pace of reforms and execution, India was on track to clock a GDP of $30 trillion by 2050 and possibly a stock market capitalisation at $45 trillion. He highlighted three key factors that would act as enabling factors in place for this growth — demographic dividend, digitalisation and the transition of the economy to green sources of energy. Morgan Stanley in its strategy report earlier this month said these very factors had put the foundations of a New India. The United States of America, Gautam Adani said, was a $23 trillion economy with a market capitalisation of $45-60 trillion. The nominal dollar based GDP narrative does not paint the real potential of India, even though in absolute growth number for India will be greater than any other nation between today and 2050. While it has taken India 58 years to get to its first $1 trillion in GDP, it took 12 years to add another $1 trillion. The last trillion has been added to India’s GDP has been added in only five years. Adani said within the next decade, India will start adding $1 trillion to its GDP every 12-18 months. India has to be seen in this context. India will achieve this incredible growth without compromising on its democracy and diversity said Adani. The audience cheered on as Adani said that well before 2030, India would be the world’s third largest economy and, thereafter, the world’s second largest economy by 2050. A set of interconnected factors would drive India’s growth over the next three decades. The demographic dividend would drive consumption and accelerate the growth of a tax paying nation he said. India’s median age would be just 38 years even in 2050, and over this period the population would grow by 15% to 1.6 bn but the per capita income would accelerate by 700% approximately to $16000. The Second dimension, Adani said, that would act as an enabling factor was entrepreneurship and digitalisation. Both these factors are strongly linked and can be combined to create a dynamic innovative environment. He said, “Our digitised India will also transform healthcare, education and skill development and create a most equitable society.” Gautam Adani, whose Adani Group is looking to invest $70 bn over the next decade in green energy, dwelled a lot on the energy transition and it’s potential for India. He said the third dimension that would prove to be a powerful transformation for India was in the space of energy transformation. “Energy poverty is today developing world’s greatest challenge and this gap will need to be mostly filled with renewable energy,” he explained. By 2050 India will need 400 more units of energy than it currently consumes. “While this may seem challenging, the technology advancement that we are seeing is expected to make this possible,” Adani said. The combination of solar and wind power coupled with green hydrogen opens up unprecedented possibilities for India. “Cooling the planet down will be one of the most profitable businesses and largest of job creators over the next several decades,” Adani said. Addressing the World Congress of Accountants at the Jio Convention Centre in Mumbai on Saturday, Adani said super powers of this multipolar world are those that take responsibility to step in and help others in a crisis and not bully other nations into submission. ”The style of capitalism that drives growth for the sake of growth and ignores the social fabric of the society is rightfully facing its greatest pushback ever. It is in such a multipolar world that the foundation of India, increasing economic might coupled with its culture and beliefs becomes relevant as it takes its journey to becoming an economic superpower which combines monetary growth with social growth all within the bounds of a democratic society.” SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/economy-resilient-but-sensitive-to-global-headwinds-rbi-article/articleshow/95605014.cms" style="">Economy resilient, but sensitive to global headwinds: RBI article</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/all-is-not-that-well-say-market-experts-even-as-stocks-chase-new-highs/articleshow/95599973.cms" style="">‘All is not that well’, say market experts even as stocks chase new highs</a>

India on course to become world’s second largest economy by 2050, says Gautam Adani

<ul class="summary-list"><li>The US looks poised to enter a recession, thanks to troubling trends in household finances.</li><li>Economist David Rosenberg pointed to rising debt levels and shrinking incomes among American households.</li></ul>The US still looks poised to enter a recession, as rising debt and shrinking incomes are setting the economy up for a downturn. That's according to David Rosenberg, a top economist and the founder of Rosenberg Research who's been warning for months that the US looks like it is headed for an economic contraction.In a recent note to clients, Rosenberg said there were a number of "imbalances" that could throw off the economy from its current growth streak.<a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-score/average-american-debt">Household debt</a>, for one, is on the rise, with a record $17.8 trillion worth of debt recorded among US households in the fourth quarter, according to Federal Reserve data. Debt per capita, another measure of how leveraged households are, also reached an all-time high of $62,000 — around 17% higher than levels recorded prior to the 2008 financial crisis, Rosenberg noted.<div type="image" title="A graph showing household debt in the US rising over the last 10 years." height="913" width="1033" msid="112353903" hostid="261" sizebytes="30668"></div><div type="image" title="A graph showing debt balance per capita rising over the last 10 years." height="938" width="1043" msid="112353900" hostid="261" sizebytes="32468"></div>More Americans also appear to be <a target="_blank" class="" href="https://www.businessinsider.com/credit-card-debt-interest-rates-consolidation-economy-recession-soft-landing-2024-2">falling behind on their bills</a>. The share of credit card loans that recently transitioned into serious delinquency rose past 7% in the second quarter, up from 5% the prior period. Meanwhile, the share of auto loans that transitioned into serious delinquency rose 2.88%, up from 2.41% the prior quarter, according to the central bank's latest <a target="_blank" href="https://fred.stlouisfed.org/series/DRCCLACBS">Household Debt and Credit Report</a>.<div type="image" title="A graph showing new seriously delinquent credit card balances rising." height="930" width="1131" msid="112353902" hostid="261" sizebytes="39626"></div><div type="image" title="A graph showing new seriously delinquent auto loans rising." height="947" width="1081" msid="112353904" hostid="261" sizebytes="38768"></div>When combined, outstanding credit card and auto loan debt amount to around $2.8 trillion, representing a larger pool of debt than was seen in the subprime mortgage crisis, Rosenberg said."This is no small matter, even if this cycle won't lead to any financial contagion or banking sector fiascos. You don't need a disaster to generate a classic <a target="_blank" class="" href="https://www.businessinsider.com/when-will-next-recession-hit-us-healthy-economy-financial-security-2024-5#:~:text=The%20NBER%20defines%20a%20recession,59%20months%20in%20a%20recession.">NBER-defined recession</a>," he added.Meanwhile, household incomes are shrinking, creating another source of pressure on American consumers. <a target="_blank" href="https://www.bea.gov/data/income-saving/personal-income">Real disposable personal income growth</a> has eased to just 1% on a year-over-year basis as of June, according to data from the Commerce Department, down from yearly growth of over 5% recorded in June of last year.The <a target="_blank" href="https://fred.stlouisfed.org/series/PSAVERT">personal savings rate</a> has also been dragged down, falling to 3.4% in June, down from the average 8% savings rate recorded prior to the pandemic."If this measure of consumer behavior ever does pull a Bob Farrell mean-reversion, we will be in a nasty recession unless somehow work-based incomes do the near-impossible and re-accelerate in the face of a rising jobless rate," Rosenberg said.Markets have been increasingly concerned about the risk of recession, particularly amid recent weakening in the labor market. The <a target="_blank" href="https://www.businessinsider.com/unemployment-rate-job-growth-july-labor-market-economic-data-2024-7">economy added fewer jobs than expected in July</a>, while the unemployment rate spiked to 4.3%, the highest jobless rate seen since the pandemic.Rosenberg has predicted that the unemployment rate will continue to rise through the end of the year as businesses continue to struggle financially. The <a target="_blank" href="https://www.businessinsider.com/layoffs-recession-economy-job-market-outlook-fed-interest-rates-debt-2024-3">jobless rate could end 2024 around 5%,</a> he previously told Business Insider, though his forecast assumes the US economy will enter a recession.

Rising household debt and shrinking incomes are setting the stage for a recession, top economist says

New Delhi, Along with the sharp decline in poverty in <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>, there has also been a marked reduction in the rural-urban income divide in the country, according to an SBI Research analysis of a Consumer Expenditure Survey released on Tuesday. Rural Poverty has staged a significant 440-basis point decline since 2018-19 and <keyword id="20742154" type="General" weightage="20" keywordseo="urban-poverty" source="keywords">Urban Poverty</keyword> a 170-basis point decline post-pandemic, which shows that the government initiatives for promoting the welfare of the bottom of the pyramid are having a significant beneficial impact on rural livelihood, the report states. Rural Poverty is now at 7.2 per cent (25.7 per cent in 2011-12 while <keyword id="19945793" type="General" weightage="20" keywordseo="urban" source="keywords">Urban</keyword> Poverty is at 4.6 per cent (13.7 per cent in 2011-12), official data show. The report further states that India is becoming more aspirational as indicated by the increasing share of discretionary consumption (like spending on beverages, intoxicants, entertainment, durable goods, etc.) in rural and urban areas. The speed of aspiration is swifter in rural areas as compared to urban areas The SBI report states that the difference between rural and urban monthly per capita consumption expenditure (MPCE) is now at 71.2 per cent, a rapid decline from 88.2 per cent in 2009-10. Around 30 per cent of the Rural MPCE is explained mainly due to steps taken by the government in terms of DBT transfers, investments in building of rural infrastructures, augmenting farmer's income, all together improving the rural livelihood significantly. Enhanced physical infrastructure is enabling two-way rural-urban mobility, which is the prime reason for the incrementally shrinking horizontal income gap between the rural and urban landscape and the vertical income gap within rural Income classes, according to the SBI report. The states once considered laggards are showing the maximum improvement in rural and urban gap. States like Bihar, <keyword id="19894922" type="General" weightage="20" keywordseo="uttar-pradesh" source="keywords">Uttar Pradesh</keyword>, Madhya Pradesh are showing increasingly the impact of these factors, the report adds. The bottom half of the rural pyramid are now having consumption patterns mostly converging to urban counterparts. The report also states that revised MPCE weights in CPI computation could help India real GDP growth for FY24 to top 7.5 per cent. Other highlights: *Rural and Urban consumption are growing, on an average, at nearly the same growth rate (2.66 per cent for rural, 2.59 per cent for Urban) across classes. Using the statistical equivalent of <keyword id="20744250" type="General" weightage="20" keywordseo="gini-coefficient" source="keywords">Gini Coefficient</keyword>, Horizontal Consumption Inequality between Rural and Urban across fractiles has declined from 0.560 to 0.475 *Urban Rural gap as a percentage of rural consumption is on a declining trend. It has declined from 90.8 per cent in 2004-05 to 71.2 per cent in 2022-23 and we believe, is projected to further decrease to 65.1 per cent in 2029-30 *In the lowest segment, urban consumption is only 46 per cent more dissimilar than the rural counterpart. Across fractile classes, urban consumption is only 68 per cent more dissimilar than rural counterpart, a number much less than the all India average. This indicates the bottom half of the rural pyramid are now having MPCE patterns mostly converging to Urban counterparts.

India's rural-urban income gap declines sharply amid fall in poverty level: SBI Report

18 years after the introduction of the euro, the single currency has still not fulfilled its promise of bringing the Spanish economy closer to that of its European partners. Despite the fact that Spain's GDP has grown above the Eurozone average on quite a few occasions over the last 5 years, this growth has not translated into an improvement in per capita income that brings it closer to that of neighboring countries.Specifically, the gap between Spain's per capita income and the Eurozone average has increased by up to 30% since the last crisis, reversing the progress made until 2008, when Spain's per capita wealth was 15% below that of the Eurozone, its lowest level ever, <a href="https://www.elconfidencial.com/economia/2020-12-11/adios-convergencia-pib-per-capita-espana-30-inferior-euro_2867364/" target="_blank" rel="noopener">according to</a> El Confidencial.Thus, Spain's GDP per capita stood at the second and third quarter of 2020, when the economy suffered the greatest impact of the coronavirus, at 30% behind the average of the 19 countries of the single European currency, figures that had not been seen since 1999.<a href="https://www.businessinsider.es/15-paises-riqueza-habitante-mundo-253000">The 15 richest countries per capita in the world</a>This means that Spain has lost in the decade since the previous economic crisis all progress in convergence with the standards of living in Europe, <a href="https://www.businessinsider.es/3-autonomias-tienen-menos-riqueza-persona-antes-crisis-499921">especially from 2011, when the crisis of the euro placed Spain, Greece, Italy, Portugal and Ireland in a recession</a> that managed to avoid the economies of northern European Union, according to the digital newspaper.However, part of the ground lost during the previous recession was recovered between 2013 and 2016, when the recovery of the Spanish economy led it to register annual growth rates that in some cases doubled those of the Eurozone, although this process was slowed down and <a href="https://www.businessinsider.es/pib-capita-espana-2017-fue-14-puntos-inferior-eurozona-265667">has been reversed between 2016 and 2019, although especially in 2017, with a difference of 14 points</a>.In the last 4 years<a href="https://www.businessinsider.es/riqueza-espanoles-ha-desplomado-ultimos-20-anos-763505"> the gap has increased again despite the continued growth of the Spanish GDP</a>, since this growth has not been based on an increase in productivity, but in employment, according to El Confidencial, which estimates that since 2002 the income per capita has increased by 2,600 euros per quarter, to 6,100 euros, while that of the Eurozone has grown by 3,300 euros.Thus, Spain's entry into the euro has not led to an improvement in growth, at least since 2008, nor has it prevented the country from being among the worst hit in the last two economic crises. In addition, the digital media criticizes the fact that it has not improved the situation of the productive fabric, aggravating the loss of weight of industry over services, which has reduced the value and economic stability of employment.In fact, the gap is even more pronounced when considering the 27 countries of the European Union, despite the fact that convergence was achieved in 2008. Since then, Spain's per capita GDP has grown by 1% and that of the EU by 20%, which translates into a difference of 1,400 euros per quarter or more than 5,600 euros per year.

Spain's per capita income drops again to 30% below the Eurozone average and falls back to 1999 levels

<ul class="summary-list"><li>The rate of suburban poverty rose three times faster than urban poverty between 2019 and 2022. </li><li>Suburbs in major metros in the South, West, and Midwest saw some of the biggest jumps in poverty. </li></ul>Poverty has been on the rise in American suburbs for <a href="https://time.com/3060122/poverty-america-suburbs-brookings/">the last two decades</a>. But the pandemic has accelerated the trend of suburban poverty rising at a faster rate than urban poverty, according to new US Census data. The number of people living in poverty in the US grew by about 1.5 million to a total of almost 41 million between 2019 and 2022, bringing the rate of poverty to 12.6% nationwide, up from 12.3% in 2019, according to the Census Bureau's most recent <a href="https://www.census.gov/programs-surveys/acs">American Community Survey</a>. The population living in poverty grew three times as fast in major metro suburbs as it did in major cities between 2019 and 2022, the Brookings Institution found in <a href="https://www.brookings.edu/articles/post-pandemic-poverty-is-rising-in-americas-suburbs/">a new report</a>. More than 60% of the growth in poverty across the country occurred in the suburbs.A plurality of Americans call the country's increasingly diverse suburbs home. Nearly half of people in the US — 47% — live in suburbs, 21% live in major cities with over 500,000 residents, 18% live in small and medium-sized metro areas, and 14% live in rural areas. Suburban communities in major metro areas in the South, West, and Midwest, including Washington, DC, Houston, San Francisco, Ogden, Utah, St. Louis, and Minneapolis-Saint Paul, saw some of the biggest jumps in poverty over the last few years, Brookings found. No suburban community in a major metro area saw its poor population decline between 2019 and 2022, but some saw an influx in new residents living above the poverty line, which brought their poverty rates down. But suburbs still count among <a href="https://www.bloomberg.com/news/articles/2019-03-07/the-decline-of-the-suburbs-is-at-odds-with-the-data">the wealthiest communities in the country</a>. While the rate of poverty is rising faster in suburbs than in cities overall, cities still have a higher per capita poverty rate on average. In 2022, 9.6% of suburban dwellers lived in poverty, while 16.2% of residents of major cities were poor, Brookings noted. The shift in the geography of poverty in the US is a result of <a href="https://www.brookings.edu/articles/the-changing-geography-of-us-poverty/">a variety of factors</a>, including rising housing costs in urban areas. More upwardly mobile and affluent people have moved into cities over the last two decades, helping bid up rents and home prices, which has fueled an affordability crisis in cities across the country. Over the last few years, housing costs have shot up even more, pushing many lower-income people out into the suburbs. Suburban communities have also grown and attracted a more diverse population in recent years, and jobs — including low-wage employment — have increasingly moved outside urban cores. The rise in suburban poverty poses a challenge for many suburban areas that don't have particularly robust mass transit systems, lack a strong network of non-profit groups assisting low-income folks, and don't have well-funded social services.

Poverty is rising faster in American suburbs as lower-income people are pushed out of big cities

<keyword id="3658" type="COUNTRY" weightage="100" keywordseo="India">India</keyword> is becoming richer day-by-day compared to countries such as the <keyword id="6354458" type="COUNTRY" weightage="60" keywordseo="US">US</keyword>, Britain, Japan, France, Germany and Brazil. 
 Its wealth has increased by whopping 211% over the last 15 years and only four countries — Indonesia, <keyword id="1334" type="COUNTRY" weightage="100" keywordseo="China">China</keyword>, Russia and Australia — have performed better than India. 
 
In India, <a href="http://www.businessinsider.in/searchresult.cms?query=per+capita+wealth+increased+">per capita wealth increased</a> from $900 in 2000 to $2,800 in 2015. India is now the 10th richest country in the world, ranked according to total individual wealth that refers to <a href="http://www.businessinsider.in/searchresult.cms?query=private+wealth+held+by+all+the+individuals+in+each+country">private wealth held by all the individuals in each country</a>. 
 
However, if we rank India according to per capita wealth, it is placed last in the top 20 countries. According to the New World Wealth's report on the wealthiest 20 countries in the world, when we look at per capita wealth, Switzerland is at the top spot with $285,100 per capita wealth followed by Australia ($204400), the US ($150600) and the UK ($147600). 
 
<a href="http://www.businessinsider.in/searchresult.cms?query=private+wealth+held+by+all+the+individuals+in+each+country">One reason behind increase in wealth in India is population explosion</a>. India and Indonesia make it to the top 20 richest list due to their large populations. On a per capita basis, the two countries are quite poor. 
 
Indonesia witnessed a rise in wealth by 362%, while for China, it was 341%, Russia 253% and Australia 248%. At the same time some of the major western countries witnessed a marginal increase in their wealth during the same period. 
 
If we talk about Japan, its wealth increased by only 39%, while the US and the UK witnessing 41% and 58% rise respectively. 
 
(Image: Indiatimes)

India is becoming richer! Wealth rose more than 200% in last 15 years

<ul class="summary-list"><li><keyword id="14343470" type="UNKNOWN" weightage="60" keywordseo="real-disposable-income" source="Orion">Real disposable income</keyword> — what people can spend after taxes and <keyword id="11894140" type="UNKNOWN" weightage="60" keywordseo="inflation" source="Orion">inflation</keyword> — has steeply declined.</li><li>The measure is the "strongest predictor" of midterm results, according to <keyword id="6361649" type="UNKNOWN" weightage="60" keywordseo="goldman-sachs" source="Orion">Goldman Sachs</keyword>.</li></ul>The <a href="https://www.businessinsider.com/inflation-outlook-pce-may-peaked-gas-prices-food-lifting-costs-2022-6">first hints of an inflation cooldown</a> have emerged, but it's likely arriving too late to save Democrats' election hopes.Data published Thursday shows surging prices continuing to eat away at Americans' finances. Real disposable income per capita, which tracks what people can spend after adjusting for inflation and taxes, slid through May to $45,490, according to the <a href="https://www.bea.gov/data/income-saving/personal-income">Bureau of Economic Analysis</a>. The drop extends the steep decline that started early last year and brings the measure further below the 2021 peak of $57,597.The drop reflects the grim reality facing most households and, by extension, the Democratic party. The <keyword id="12025846" type="UNKNOWN" weightage="60" keywordseo="midterms" source="Orion">midterms</keyword> were already expected to be an uphill battle for the party, as holding control of the White House and the legislature tends to mean at least one chamber of <keyword id="11893699" type="UNKNOWN" weightage="60" keywordseo="congress" source="Orion">Congress</keyword> will flip in the next set of elections. Yet the new economic data suggests the party's losses will be even larger than previously anticipated.The fiscal stimulus deployed by the government earlier in the pandemic has largely dried up. At the same time, inflation is running <a href="https://www.businessinsider.com/inflation-report-cpi-may-gas-prices-federal-reserve-rate-hikes-2022-6">at the fastest pace in 41 years</a>, forcing Americans to pay much more just to maintain their living standards.Other data suggests the decline in disposable income is the nail in the coffin for the reopening spending spree. Retail sales unexpectedly dipped in May, snapping the rally seen throughout 2022. After vaccine rollouts and the reversal of lockdown measures sparked extraordinarily strong spending, shoppers seem to have finally had enough of soaring prices. They're upset, too; consumer sentiment <a href="https://www.businessinsider.com/economic-outlook-consumer-sentiment-lowest-level-ever-2022-6">hasn't been this bad</a> since the University of Michigan started tracking it in the late 1970s.Real disposable income growth has long been "the strongest predictor of midterm election results," Goldman Sachs analysts led by Jan Hatzius said in a note published Monday, adding the measure even trumps gas prices and overall inflation. Disposable income has fallen more over the past year than in any midterm election year since data collection began in 1959, dragged lower by dwindling stimulus aid and sky-high inflation.Even if prices start to drop and the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword> improves, it's probably too late to buoy Democrats' election hopes, the analysts said."Voters' views regarding the economy are largely set," the team added. "Policies to incrementally lower inflation ahead of the election, for example, might not have much of an effect on the outcome."To be sure, the economic backdrop isn't all bad for Democrats' chances. Payroll growth is the second most relevant economic variable for midterm election outcomes, the analysts said. That bodes well for President <keyword id="99719" type="UNKNOWN" weightage="60" keywordseo="joe-biden" source="Orion">Joe Biden</keyword>'s party. Job growth continued to surpass expectations through May, with the US adding 390,000 nonfarm payrolls and the unemployment rate holding at a historically low 3.6%. The US is on track to return to its pre-pandemic job count by the end of July, making the labor market's recovery one of the fastest in history.Still, most economic indicators signal the GOP will take control of the House, Goldman said. Other measures like gas prices, food inflation, and headline price growth have a long ways to go before returning to sustainable levels. The past year of skyrocketing prices, dwindling optimism, and crumbling finances are set to take their toll on Democrats' influence.

People are buying less stuff as inflation rages &mdash; and it's a terrible sign for Democrats' chances in the midterms

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

You Searched For "per capita income" and got 10 results

India to remain fastest growing major economy in 2024-25, says CEA Nageswaran

ANI

India's strong economic recovery is led by fiscal expenditure: DSP MF

ANI

India on course to become world’s second largest economy by 2050, says Gautam Adani

Malini

Bhakti

Rising household debt and shrinking incomes are setting the stage for a recession, top economist says

Jennifer Sor

India's rural-urban income gap declines sharply amid fall in poverty level: SBI Report

IANS

Spain's per capita income drops again to 30% below the Eurozone average and falls back to 1999 levels

Adrián Francisco Varela

Poverty is rising faster in American suburbs as lower-income people are pushed out of big cities

Eliza Relman

India is becoming richer! Wealth rose more than 200% in last 15 years

BI India Bureau

People are buying less stuff as inflation rages and it's a terrible sign for Democrats' chances in the midterms

Ben Winck

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

Melanie Lockert

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