India's economy is likely to shrink by 5.3 per cent this fiscal, the <keyword id="8057424" type="UNKNOWN" weightage="20" keywordseo="Lowest-GDP-growth">lowest GDP growth</keyword> in the Indian history and the sixth instance of economic contraction, India Ratings and Research said on Wednesday. <br /><br /> "The disorder caused by the COVID-19 pandemic unfolded with such a speed and scale that the disruption in production, breakdown of supply chains/trade channels and total wash out of activities in aviation (some activities have started now), tourism, hotels and hospitality sectors will not allow the economic activity to return to normalcy throughout FY21," the rating agency said in a report. <br /><br /> As a result, besides contracting for the whole year, GDP will contract in each quarter in FY21 (April 2020 to March 2021). <br /><br /> However, the agency believes the GDP growth would bounce back in the range of 5-6 per cent in <keyword id="5027223" type="COMPANY" weightage="20" keywordseo="FY22">FY22</keyword> (April 2021 to March 2022), aided by base effect and return of gradual normalcy in the domestic as well as global economy. <br /><br /> India Ratings (Ind-Ra) said India's gross domestic product (GDP) will contract 5.3 per cent in FY21. <br /><br /> "This will be the lowest GDP growth in the Indian history (Indian GDP data is available from FY51) and sixth instance of economic contraction, others being in FY58, FY66, FY67, FY73 and FY80; the previous low was negative 5.2 per cent in FY80," it said. <br /><br /> The government had announced an economic package of Rs 20.97 lakh crore (10 per cent of GDP) on May 12, 2020 to mitigate the adverse impact of COVID-19 and related lockdown. However, Ind-Ra's calculations, excluding the <keyword id="35025" type="PERSON" weightage="20" keywordseo="monetary-measures">monetary measures</keyword> and existing proposals in the union budget, show that the direct fiscal impact is only Rs 2.145 lakh crore (1.1 per cent of GDP). <br /><br /> "The credit and liquidity enhancing measures announced in the economic package in combination with some of the earlier steps announced by the Reserve Bank of India (RBI) will certainly address the supply-side issues of the economy," it said. <br /><br /> The Indian economy even before the COVID-19 related lockdown was suffering on the demand side, as all the demand drivers, except government final consumption expenditure (GFCE), namely private final consumption expenditure (PFCE), <keyword id="756316" type="PERSON" weightage="20" keywordseo="gross-fixed-capital-formation">gross fixed capital formation</keyword> (GFCF) and net exports were <keyword id="2258914" type="PERSON" weightage="20" keywordseo="Floundering">floundering</keyword>. <br /><br /> The lockdown and its impact on the economy and livelihoods only aggravated the sagging consumption demand. <br /><br /> "Ind-Ra believes the government is aware of it; but, the near absence of demand-side measures in the economic package indicates the hard budget constraint facing the government," the report said. <br /><br /> Ind-Ra saw PFCE contracting 5.1 per cent in FY21 (FY20: 5.3 per cent yoy) to reach a level lower than FY19's. Even GFCF will contract 17.6 per cent in FY21 and the investment revival will now be pushed beyond FY22 due to a combination of excess capacity, weak demand, stretched balance sheet of Indian corporates and budget constraints leading to reduced government capex. <br /><br /> "The external environment continues to be challenging due to COVID-19 related restrictions coupled with trade friction and protectionist policy pursued by many developed economies," it said. <br /><br /> Ind-Ra expected merchandise exports to decline 9.4 per cent in FY21 (FY20: negative 4.9 per cent), as all major export commodities would clock negative growth. Merchandise imports are expected to decline 17.4 per cent in FY21 (FY20: negative 8.9 per cent). <br /><br /> As a result, the trade deficit is estimated to decline to a four-year low of USD 97.7 billion (3.9 per cent of GDP) and current account deficit to USD 3.3 billion (0.1 per cent of GDP) in FY21. <br /><br /> However, 1QFY21 may see a current account surplus. <br /><br /> "From the supply side, agriculture is the only bright spot. Agricultural gross value added (GVA) is expected to grow 3.5 per cent in FY21," the rating agency said adding the Indian Meteorological Department has predicted the monsoon rainfall to be 102 per cent of long period average (1961-2010) in 2020. <br /><br /> Ind-Ra expects the retail and wholesale inflation to come in at 3.6 per cent and 1.2 per cent, respectively, in FY21. <br /><br /> "Fiscal deficit of the central government in FY21 is expected to more than double (7.6 per cent of GDP) the budgeted amount (3.5 per cent of GDP). The majority of the fiscal slippage will be from the revenue side," it added. <br /><strong><br />SEE ALSO: <a href="https://www.businessinsider.in/india/news/karnataka-health-minister-hints-at-lockdown-in-covid-hit-bengaluru-again/articleshow/76542217.cms" data-type="tilCustomLink">Karnataka Health Minister hints at lockdown in Covid-hit Bengaluru again </a><br /></strong><a href="https://www.businessinsider.in/business/news/mukesh-ambani-radhakishan-damani-and-shiv-nadar-took-over-10-years-to-become-a-billionaire/slidelist/76547186.cms" data-type="tilCustomLink"><strong>Indians took 17 years on an average to make their first billion— and it has gotten a lot faster recently</strong></a><br />

India's GDP to contract by 5.3% due to coronavirus 'disorder', says India Ratings

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/59e0959a1f848920008b4c16-1777/rts1g6ns.jpg" alt="Big waves open floodgates" data-mce-source="Reuters/Nguyen Huy Kham" data-mce-caption="People watch as Hoa Binh hydroelectric power plant opens the flood gates after a heavy rainfall caused by a tropical depression in Hoa Binh province, outside Hanoi, Vietnam." /><p class="source"><span>Reuters/Nguyen Huy Kham</span></p><p class="caption">People watch as Hoa Binh hydroelectric power plant opens the flood gates after a heavy rainfall caused by a tropical depression in Hoa Binh province, outside Hanoi, Vietnam.</p></div><p></p></div></div>Here is what you need to know. </p><p><strong><a href="http://www.businessinsider.com/trump-ends-cost-sharing-reduction-csr-payments-2017-10">Trump made a huge move that could blow up Obamacare</a>.  </strong>President Donald Trump announced Thursday evening that he will end the Obamacare cost-sharing reduction payments, a move that could wreck the law's individual insurance exchanges and send healthcare costs soaring for many Americans.</p><p><strong><a href="http://www.businessinsider.com/china-trade-data-september-2017-10">China's trade surplus narrows</a>.</strong> Imports grew by 18.7% year-over-year in US dollar terms while exports climbed 8.1%, causing China's trade surplus to narrow to $28.47 billion in September from $41.99 billion in August.<strong> </strong></p><p><strong><a href="http://www.businessinsider.com/stock-market-today-traders-should-fear-friday-the-13th-in-october-2017-10">Stock traders should fear Friday the 13th - especially in October</a>. </strong>The S&amp;P 500 has fallen 0.54%, on average, during the 12 stock market sessions that have fallen on Friday the 13th in October, data compiled by LPL Financial's Ryan Detrick shows. </p><p><strong><a href="http://markets.businessinsider.com/news/stocks/snap-stock-price-best-level-in-more-than-3-months-2017-10-1003991925">Snap hits a three month high</a>. </strong>Shares rallied 3.35% to $16.51 on Thursday, making for their best close since July 10.  </p><p><strong><a href="http://www.businessinsider.com/samsung-electronics-ceo-steps-down-2017-10">Samsung's CEO steps down</a>. </strong>The surprising resignation of Samsung Chairman and CEO <span>Kwon Oh-hyun comes at a time when he was expected to take on a bigger role following the jailing of group scion Jay Y. Lee, Reuters says. </span></p><p><strong><a href="http://www.businessinsider.com/japans-kobe-steel-to-pay-back-customers-2017-10">Kobe Steel will pay back its customers</a>. </strong>The Japanese steelmaker said on Friday that it would pay back customers who were impacted by its fabrication of data for its products, Reuters reports. </p><p><strong><a href="http://www.businessinsider.com/fidelitys-manager-fired-after-alleged-sexual-harassment-2017-10">A star stock picker at Fidelity has reportedly been fired</a>. </strong>Gavin Baker, a star stock picker at Fidelity, was reportedly fired after he allegedly sexually harassed a junior female staffer, the Wall Street Journal says, citing an attorney for the staffer and people familiar with the situation.</p><p><strong><a href="http://markets.businessinsider.com/indices">Stock markets around the world trade mixed</a>. </strong>Japan's Nikkei (+0.96%) led the gains in Asia and Britain's FTSE (-0.18%) trails in Europe. The S&amp;P 500 is set to open little changed near 2,552.</p><p><strong>Earnings reports trickle out. </strong>Bank of America reports ahead of the opening bell.</p><p><strong>US economic data picks up. </strong>CPI and retail sales will be announced at 8:30 a.m. ET before University of Michigan consumer confidence is released at 10 a.m. ET. The US 10-year yield is up 1 basis point at 2.33%.</p> 

10 things you need to know before the opening bell

<img class="gwt-Image" src="/photo/48109719.cms" />In contrast to its earlier prediction, private weather forecaster Skymet stated it might revise its forecast as rains across country stood 32% below average.<br />
 <br />
Vice-president, meteorology at Skymet, GP Sharma said that by July-end, they might come with a revised forecast for the season and the months of August and September.<br />
 <br /> The forecaster had earlier forecast above normal monsoon rains this year while most other forecasters, including the official <keyword id="6355166" type="ORGANIZATION" weightage="100" keywordseo="India-Meteorological-Department">India Meteorological Department</keyword> (IMD), predicted less than normal rains.<br />
 <br />
However, he said that Skymet would not bring its forecast down, adding that he didn't expect July rains to be 104% of normal as forecasted earlier.<br />
 <br />
"It will surely be in the minus side. But considering there is a margin error of ± 9 per cent in the monthly forecast, we are not wrong in our forecast," Sharma told Economic Times.<br />
 <br />
The financial daily reported that as of July 15, the monthly monsoon rains across the country were 32% below average while the deficit for the whole season stood at 6%.<br />
 <br />
Skymet says that monsoon rains will be 102% of its Long Period Average (LPA) this year, whereas IMD predicted only 88% of the average.<br />
 <br />
"Northwestern India is the only region which has a cumulative rain surplus till now. We expect some improvement in the second half of July, but the deficit will prevail,” DS Pai, head of long-range forecasting at IMD, told ET.<br />
 <br />
IMD is expected to release its next forecast on July 31. It has forecast July rainfall over the country to be 92% of its LPA.<br />
 <br />
"Rainfall deficit for the country in July is 44 mm. We should get 12-13 mm rain daily to catch up with the normal," Skymet's Sharma told ET.<br />
 <br />
He added that monsoons could spring a surprise anytime. "Heavy widespread monsoon showers for a few days can wipe out the deficit as happened in the previous year. Monsoon rains were 40% below normal across India till July 15 in 2014 and with spell of heavy rains the deficit came down to 22% by the month end," Sharma told the financial daily.<br />
 <br />
Meanwhile, Skymet expects August rains to be 99% of the average with good rainfall in the first ten days of the month. <br />
<br />
(Image: Indiatimes)<br />


Bad news! Skymet may revise forecast, expects to rain less in July

<h2><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5d8cf5a62e22af074e37cfe5-827/gp0sttcf5mediumreswithcreditline.jpg" border="0" alt="GP0STTCF5_Medium_res_with_credit_line" data-mce-source="Christian Aslund/Greenpeace" data-mce-caption="The ship, Arctic Sunrise, surrounded by ice floes in the ocean near Svalbard, Norway." /><p class="source"><span>Christian Aslund/Greenpeace</span></p><p class="caption">The ship, Arctic Sunrise, surrounded by ice floes in the ocean near Svalbard, Norway.</p></div><p></p></div></div></h2><ul class="summary-list"><li>The ocean current system in the Atlantic Ocean, called <a href="https://www.businessinsider.com/climate-change-amoc-day-after-tomorrow-2017-1">the Atlantic Meridional Overturning Circulation</a> (AMOC), is responsible for western Europe's warm temperatures.</li><li>But according to a new report from the United Nations, rising water temperatures and changes to the salinity of the world's oceans is causing the AMOC to weaken. </li><li><a href="https://www.businessinsider.com/day-after-tomorrow-was-right-and-wrong-about-climate-shifts-2019-3">Other recent research</a> has found that the AMOC could slow significantly if enough fresh water from melting ice enters the ocean.</li><li>Weaker current circulation could bring <a href="https://www.businessinsider.com/polar-vortex-hitting-us-might-be-connected-to-global-warming-2019-1">more extreme weather</a> to the Northern Hemisphere.</li><li>A version of this scenario is depicted in the movie "The Day After Tomorrow," though the film isn't scientifically accurate.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul><p>Unprecedented melting of the Arctic and Antarctic ice sheets, combined with warming ocean water, could cause sea levels to rise by more than 3 feet by the end of the century, according to new report.</p><p>The assessment was compiled by more than 100 authors from 36 countries as part of the United Nations' Intergovernmental Panel on Climate Change (IPCC). The findings suggest that as melting glaciers add vast amounts of much fresh water to the world's oceans, the current system in the Atlantic is likely to weaken over time.</p><p>This system, called the Atlantic Meridional Overturning Circulation (AMOC), moves ocean water north and south in the Atlantic and mixes surface water with that from deep below. It's partially responsible for western Europe's warm and wet climate.</p><p>The UN report concluded that "the AMOC is projected to weaken in the 21st century" under every climate-change scenario. That means changes are coming to the north Atlantic even if we significantly limit greenhouse-gas emissions (and, consequently, planetary warming).</p><p><em><strong>Read More:</strong> <a href="https://www.businessinsider.com/sea-level-rise-3-feet-in-80-years-un-report-2019-9">Sea levels are projected to rise 3 feet within 80 years, according to a new UN report. Hundreds of millions of people could be displaced.</a></em></p><p>"We are definitely going into a world where AMOC is getting weaker," Francesco Muschitiello, the author of a different study about the AMOC, <a href="https://www.businessinsider.com/day-after-tomorrow-was-right-and-wrong-about-climate-shifts-2019-3">previously told Business Insider</a>.</p><p>As that happens, Europe could get colder, drier weather, and the tropics could experience stronger hurricanes.</p><h2>Why melting glaciers and warming oceans weaken ocean currents</h2><p>Scientists liken the AMOC to a kind of water conveyor belt.</p><p>Once warmer water reaches the area around the UK, it cools and sinks to the bottom of the Labrador and Nordic Seas. Then that cold water makes a U-turn and snakes its way along the ocean floor, all the way down to Antarctica's Southern Ocean.</p><p>When the AMOC is flowing quickly, western Europe enjoys a wet and warm climate. But if it gets sluggish and weak, warm tropical waters don't get moved up, and the north Atlantic cools.</p><h2><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/59c13ac29803c5df008b76d2-2000/436189mainatlantic20100325a-full.jpg" border="0" alt="ocean currents" data-mce-source="NASA/JPL" data-mce-caption="The Atlantic Meridional Overturning Circulation carries warm water from the tropics into the North Atlantic (in red), where the water cools and sinks before flowing back south (in blue)." data-link="https://www.nasa.gov/topics/earth/features/atlantic20100325.html" /><p class="source"><span><a href="https://www.nasa.gov/topics/earth/features/atlantic20100325.html">NASA/JPL</a></span></p><p class="caption">The Atlantic Meridional Overturning Circulation carries warm water from the tropics into the North Atlantic (in red), where the water cools and sinks before flowing back south (in blue).</p></div><p></p></div></div></h2><p>The AMOC's speed depends on a delicate balance of salt and fresh water. Salty water is dense, so it sinks easily. But as Greenland and Antarctica's ice sheets melt, along with glaciers around the world, more fresh water is joining the AMOC.</p><p>That <a href="https://www.businessinsider.com/greenland-approaching-threshold-of-irreversible-melting-2019-1">melting is happening quickly</a>, the UN report confirmed. Greenland's ice is melting six times faster now than it was four decades ago, according to <a href="https://www.pnas.org/content/early/2019/04/16/1904242116">an April study</a> - the ice sheet is sloughing off an estimated 286 billion tons of ice per year. Two decades ago, the annual average was just 50 billion.</p><p><em><strong>Read more</strong>: <a href="https://www.businessinsider.com/greenland-approaching-threshold-of-irreversible-melting-2019-1">Greenland is approaching the threshold of an irreversible melt, and the consequences for coastal cities could be dire</a></em></p><p>In Antarctica, meanwhile, the entire <a href="https://www.businessinsider.com/un-report-devastating-arctic-temperature-rise-locked-in-2019-3">ice sheet is melting</a> nearly six times as fast as it did 40 years ago. In the 1980s, Antarctica lost 40 billion tons of ice annually. In the last decade, that number jumped to an average of 252 billion tons per year.</p><p>The addition of all that fresh water makes the salty surface water lighter and less likely to sink, <a href="https://www.scientificamerican.com/article/slow-motion-ocean-atlantics-circulation-is-weakest-in-1-600-years/">clogging up the circulation's flow</a> and weakening the AMOC.</p><h2>A weaker AMOC could mean more extreme weather</h2><p>The authors of the UN report, which focuses on the state of the world's oceans and cryosphere (the frozen parts of the planet) say they're somewhat confident that the AMOC has already weakened relative to the period from 1850-1900.</p><p>According to <a href="https://www.nature.com/articles/s41586-018-0007-4.epdf?author_access_token=fsib90gIobI_Agb9Y6Dv_tRgN0jAjWel9jnR3ZoTv0MAQC0usmARmECubT0sv_73uaai5H7Fy0aRKV4rH49xk-nG4CZmf52MUw8oGrE-ospQrzV3yPTNbpOmvENmVJ5M7TaTsKJASsuLaOE-wy0tVw%3D%3D">a 2018 study</a>, the AMOC is the <a href="https://grist.org/article/relax-the-day-after-tomorrow-isnt-going-to-happen-like-tomorrow/">weakest it's been in at least 1,600 years</a>.</p><p>That weakening is likely to cause changes in our global climate, according to the report, including more storms in northern Europe as well as a decrease in the amount of organic matter produced and circulated in the north Atlantic's marine food web. </p><p>It would also lead to less summer rainfall in southern Asian and the central African Sahel, so parts of central and west Africa could experience more drought conditions.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5d8b93fc2e22af362d45ad92-2400/nasasees4tropicalcyclonesintheatlantictoday.jpg" border="0" alt="NASA tropical cyclones" style="color: #000000;" data-mce-source="NASA" data-mce-caption="Four tropical cyclones, Katia, Lee, Maria and Nate, plagued the Atlantic Ocean basin on September 8, 2011. If the North Atlantic ocean current system weakens it could mean more extreme weather for this part of the world." data-link="https://www.flickr.com/photos/gsfc/6127588860/" /><p class="source"><span><a href="https://www.flickr.com/photos/gsfc/6127588860/">NASA</a></span></p><p class="caption">Four tropical cyclones, Katia, Lee, Maria and Nate, were seen in the Atlantic Ocean basin on September 8, 2011.</p></div><p></p></div></div></p><p>"We'll see more extreme weather patterns for sure," Muschitiello said. "Europe will get colder and drier in the long run. There will be surplus of heat in subtropics, which is important for hurricane formation."</p><p>When subtropical waters are warmer, that contributes to more frequent and intense hurricanes in the Atlantic, since warm air holds more water vapor - and that additional moisture <a href="https://www.ucsusa.org/global-warming/science-and-impacts/impacts/hurricanes-and-climate-change.html">provides fuel for hurricanes</a>.</p><p>A weakening in the AMOC would also cause sea levels to rise along along the northeast coast of North America.</p><h2>Could the AMOC ever stop completely?</h2><p>In the 2004 film "The Day After Tomorrow," the AMOC stops almost overnight and an ice age descends on Europe and North America. People freeze to death in the streets, helicopters fall out of the sky, and a massive tidal wave engulfs New York City.</p><p>Those effects are not scientifically accurate and were hyperbolized in the film, of course, but the idea that Atlantic water circulation could shut down isn't wholly outside the realm of possibility. It's just highly unlikely.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/570eb30491058422008bc760-1400/the day after tomorrow 20th century fox.jpg" border="0" alt="the day after tomorrow 20th Century Fox" data-mce-source="20th Century Fox" /><p class="source"><span>20th Century Fox</span></p><p class="caption">In the 2004 movie, "The Day After Tomorrow," the AMOC shuts down completely.</p></div><p></p></div></div></p><p>According to Muschitiello, there are "reconstructions that suggest that the AMOC stopped entirely in the past, and that these major distortions of the AMOC led to the coldest events ever recorded."</p><p>But such an occurrence would require a huge amount of melt water - the past distortions Muschitiello is referring to happened after large swarms of icebergs broke off glaciers and floated into the north Atlantic ocean. When those iceberg armadas melted, that added an excess of fresh water into the ocean, wreaking havoc on the AMOC.</p><p>However, that influx of fresh water was several orders of magnitude higher than today's melting rates.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5d8a571c2e22af0b6c648ab3-2250/webpnet-resizeimage.jpg" border="0" alt="Antarctica" style="color: #000000;" data-mce-source="Pauline Askin/Reuters" data-mce-caption="Melting ice shows through at a cliff face at Landsend, on the coast of Cape Denison in Antarctica January 2, 2010. Antarctica pact partners have set up a new protected geological site on the frozen continent to preserve rare minerals that could shine a spotlight on the region's history and evolution over millions of years. At a meeting in Brazil in May 2014, the signatories to the Antarctic Treaty designated the Larsemann Hills region of the continent as an Antarctic Specially Protected Area. Picture taken January 2, 2010." /><p class="source"><span>Pauline Askin/Reuters</span></p><p class="caption">Melting ice shows through at a cliff face at Landsend, on the coast of Cape Denison in Antarctica January 2, 2010.</p></div><p></p></div></div></p><p>A <a href="http://advances.sciencemag.org/content/3/1/e1601666">2017 study</a> found that if the concentration of carbon dioxide in the atmosphere instantaneously doubled from the 1990 level, the AMOC could <a href="https://www.businessinsider.com/climate-change-could-shut-down-the-current-that-carries-warm-water-2017-9">collapse in 300 years</a>. Greenhouse-gas emissions are not likely to increase that dramatically, though.</p><p>The authors of the UN report also concluded that "a collapse is very unlikely." They noted, though, that it would be even more unlikely in a future with less greenhouse-gas emissions.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/teen-came-up-with-a-plan-to-clean-ocean-2016-2">This brilliant idea uses the ocean's own currents to clean up garbage</a></h3>        <div>            <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/mcTB1RwC-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script>        </div>    </div>

Melting ice is slowing down the Atlantic ocean's circulation system. Yes, that's similar to what happens in 'The Day After Tomorrow.'

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/564d6cb5dd0895a15c8b4605-3029-2272/ap_810973191720.jpg" alt="AP_810973191720" data-mce-source="AP Photo/Claude Paris" data-mce-caption="A French sailor checks a Super-Etendard jetflighter on the deck of France's nuclear-powered aircraft carrier Charles de Gaulle before to leave its home port of Toulon, southern France, Wednesday, Nov.18, 2015. France has decided to deploy its aircraft carrier in the eastern Mediterranean sea for fighting Islamic State group." /><p class="source"><span>AP Photo/Claude Paris</span></p><p class="caption">A French sailor checks a Super-Etendard jetflighter on the deck of France's nuclear-powered aircraft carrier Charles de Gaulle before to leave its home port of Toulon, southern France, Wednesday, Nov.18, 2015. France has decided to deploy its aircraft carrier in the eastern Mediterranean sea for fighting Islamic State group.</p></div><p></p></div></div>Good morning! Here's what you need to know on Thursday.</p><p><strong>1. <a href="http://uk.businessinsider.com/report-heavy-gunfire-during-police-operations-reported-in-paris-2015-11">Two people were killed and seven arrested in a northern suburb of Paris in raids targeting suspects in Friday night's terrorist attacks</a>, </strong>though it's not clear if the alleged mastermind behind the attacks is among the dead.</p><p><strong>2. <a href="http://uk.businessinsider.com/isis-russian-plane-claim-ied-2015-11">The Islamic State says it brought down a Russian passenger plane over Egypt</a><a href="http://uk.businessinsider.com/isis-russian-plane-claim-ied-2015-11"> with an improvised explosive device</a></strong>, expanding on its claim of responsibility for the October attack.</p><p><strong>3. <a href="http://uk.businessinsider.com/isis-claims-to-execute-norwegian-and-chinese-captives-2015-11">Islamic State on Wednesday said it had killed two more hostages</a> - </strong>one Chinese and one Norwegian.</p><p><strong>4. <a href="http://uk.businessinsider.com/japanese-exports-are-falling-again-thanks-in-part-to-china-2015-11">Japan in October posted a surprise $900 million trade surplus</a><span>, </span></strong>the first time since March, which came from an unexpected plunge in imports.</p><p><span><strong>5. <a href="http://www.businessinsider.com/afp-wada-suspends-russian-anti-doping-agency-2015-11">The World Anti-Doping Agency has suspended Russia's national anti-doping body</a></strong> after declaring it non-compliant.</span></p><p><strong>6. <a href="http://uk.businessinsider.com/r-irans-uranium-stockpile-has-grown-un-nuclear-agency-report-2015-11">An</a><span><a href="http://uk.businessinsider.com/r-irans-uranium-stockpile-has-grown-un-nuclear-agency-report-2015-11"> International Atomic Energy Agency report finds that </a><span><a href="http://uk.businessinsider.com/r-irans-uranium-stockpile-has-grown-un-nuclear-agency-report-2015-11">Iran's stockpile of uranium has actually increased in the past three months,</a> </span></span></strong>despite a nuclear deal signed with major world powers in July to reduce the number of centrifuges it has in operation, Reuters reports.</p><p><strong>7.</strong><span><strong> <a href="http://uk.businessinsider.com/square-finally-sets-its-ipo-price-2015-11">Jack Dorsey's payments company Square set the price for its much anticipated IPO at $9 per share</a></strong><span><strong>,</strong> which is below the $11 to $13 it was looking for, giving the company a market cap of $2.9 billion.</span></span></p><p><strong>8. <a href="http://uk.businessinsider.com/2015-el-nino-one-of-the-worst-on-record-2015-11">This year's El Niño is shaping up to be one of the most powerful on record</a></strong><strong>,</strong> t<span>he effects of which can be seen across the globe, from increased rainfall in the Southern US and Peru to drought in the Western Pacific and brush fires in Australia.</span></p><p><strong>9. <a 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The 10 most important things in the world right now

NEW DELHI: Back in April 2012, S&amp;P downgraded its outlook on India to BBB- (negative from stable) and since then the Indian government has managed to revive growth, attain fiscal consolidation and also bring down inflation.<br />
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“We expect rating agencies to upgrade their outlook for India sooner rather than later,” BofA-ML said in a report authored by Indranil Sen Gupta and Abhishek Gupta.<br />
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“We also thought the April 2012 S&amp;P outlook downgrade was unwarranted. With Moody’s downgrading their Brazil outlook last night, key EM peers are seeing downgrades,” added the report.<br />
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Last week India pitched for a rating upgrade by international credit agency Moody’s, citing steps unveiled in the Budget 2014-15 to keep the fiscal deficit in check and provide impetus to growth.<br />
<br /> Moody’s has assigned ‘Baa3’ rating to India, with a stable outlook, which suggests possibility of an upgrade. According to Moody’s, “the rating reflects high domestic savings and adequate <keyword id="6368276" type="COMPANY" weightage="80" keywordseo="Foreign-exchange">foreign exchange</keyword> reserves and the challenges posed by large fiscal deficits, recurrent inflation and weak infrastructure.”<br />
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BofA-ML has identified top 5 compelling reasons for an outlook upgrade for India:<br />
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<strong>Growth bottoming out: 5.5% FY15, 6.5% FY16, 7.5% FY18</strong><br />
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The slowdown in growth has largely been driven by the global down cycle rather than domestic structural issues. In fact, growth is bottoming out far higher than Brazil or Russia. This is why we always found concern that India would fall out of BRICs in 2012 to be baseless. In fact, BofA-ML believes that India should emerge as the second-largest EM after China by 2019.<br />
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The global investment bank continues to reiterate its standing view that India’s potential growth is about 7.5%. It says, “We never thought that potential growth should be raised to 8-9% just because an upcycle pushed growth up to 8.4% during 2004-08.”<br />
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<strong>Inflation peaking off: 8.5% in August, but 6% in 2016</strong><br />
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BofA-ML also believes that inflation is largely ‘imported’ rather than being home-grown for all the lament about India’s ‘inflation problem’. “As we have often highlighted, the RBI’s growth-inflation trade-off has been far better than most EM peers,” it says.<br />
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In any case, the global investment bank thinks that inflation is peaking. “Although we have higher-than consensus inflation forecasts (8.5% in August, 7.8% consensus; 8% in July, 7.4% consensus, 8% actual), this is driven by a temporary spike in tomato prices on poor rains. This will reverse with the seasonal rainfall deficit down to 11 per cent of normal,” it says.<br />
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<strong>Twin deficit risks overdone</strong><br />
<br /> Risks from twin deficits have proved overdone. <keyword id="6355261" type="POSITION" weightage="80" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="6390789" type="COMPANY" weightage="100" keywordseo="Jaitley">Jaitley</keyword> has expectedly stuck to the fiscal deficit target of 4.1% of GDP set in the February Budget. There are risks to his fiscal deficit target as: (1) tax projections are ambitious; (2) Fed tapering may make divestment difficult; and (3) FY14 expenditures were deferred to the current fiscal year.<br />
<br /> At the same time, this will likely not impact the government’s Rs4958bn net borrowing, as it has also inherited a large cash surplus of Rs1284bn with the RBI from the previous <keyword id="26374" type="ORGANIZATION" weightage="80" keywordseo="UPA-government">UPA government</keyword>.<br />
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<strong>RBI to buy FX to guard against contagion; hold Rs58-62/USD </strong><br />
<br /> BofA-ML continues to expect Governor <keyword id="6355561" type="PERSON" weightage="80" keywordseo="Rajan">Rajan</keyword> to buy FX at Rs58+/USD to guard against contagion as Governors Jalan and Reddy did. This is reversing the policy mistake of completely unsustainable appreciation by stopping to buy FX reserves in 2H09-1H11.<br />
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As import cover plummeted, that led to a 50% depreciation later. This will likely stabilize Rs58-62/USD. “Any emerging market today is going to look at the currency volatility and say ‘whatever money comes in, I’m going to be careful about it, I am going to build some reserves’..,” Governor Rajan reiterated last week.<br />
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<strong>RBI to cut rates even if Fed hikes; 75 bps cut February onwards </strong><br />
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BofA-ML believes that the RBI can cut rates even if the Fed hikes rates from September 2015, with Governor Rajan recouping FX reserves. “We see it cutting policy rates by 75-100bp starting in February, even if Fed Chair Janet Yellen hikes from September 2015, as our US economists expect,” it says.



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