by admin | May 25, 2021 | Economy, Markets, News
By Arul Louis,
United Nations : The International Monetary Fund (IMF) reaffirmed on Wednesday that India will be the fastest growing major economy in 2018, with a growth rate of 7.4 per cent that rises to 7.8 per cent in 2019 with medium-term prospects remaining positive.
The IMF’s Asia and Pacific Regional Economic Outlook report said that India was recovering from the effects of demonetisation and the introduction of the Goods and Services Tax and “the recovery is expected to be underpinned by a rebound from transitory shocks as well as robust private consumption.”
Medium-term consumer price index inflation “is forecast to remain within but closer to the upper bound of the Reserve Bank of India’s inflation-targeting banda of four per cent with a plus or minus two per cent change, the report said.
However, it added a note of caution: “In India, given increased inflation pressure, monetary policy should maintain a tightening bias.”
It said the consumer price increase in 2017 was 3.6 per cent and projected it to be five per cent in 2018 and 2019.
“The current account deficit in fiscal year 2017-18 is expected to widen somewhat but should remain modest, financed by robust foreign direct investment inflows,” the report said.
After India, Bangladesh is projected to be the fastest-growing economy in South Asia with growth rates of seven per cent for 2018 and 2019; Sri Lanka is projected to grow at four per cent in 2018 and 4.5 in 2019, and Nepal five per cent in 2018 and four per cent in next. (Pakistan, which is grouped with the Middle East, is not covered in the Asia report.)
Overall, the report said that Asia continues to be both the fastest-growing region in the world and the main engine of the world’s economy.
The region contributes more than 60 per cent of global growth and three-quarters of this comes from India and China, which is expected to grow 6.6 per cent in 2018 and 6.4 per cent in 2019, it said.
The report said that US President Donald Trump’s fiscal stimulus is expected to support Asia’s exports and investment.
The Asian region’s growth rate was expected to be 5.6 per cent for 2018 and 2019.
However, in the medium term the report said that “downside risks dominate” for the region and these include a tightening of global financial conditions, a shift toward protectionist policies, and an increase in geopolitical tensions.
Because of these uncertainties the IMF urged the countries in the region to follow conservative policies “aimed at building buffers and increasing resilience” and push ahead with structural reforms.
“While mobile payments are expanding sharply in such economies as Bangladesh, India, and the Philippines, on average Asia is lagging sub-Saharan Africa,” the IMF said, adding that the region should take steps to ensure it is able to reap the full benefits of increasing digitalisation in the global economy.
(Arul Louis can be reached at arul.l@ians.in)
—IANS
by admin | May 25, 2021 | Business Ideas, Economy, Entrepreneurship, Markets, News, Women Entrepreneur
By Arul Louis,
United Nations : India must focus as a priority on ensuring that more women work in the formal sector as it continues with labour reforms, according to Ken Kang, the deputy director in International Monetary Fund (IMF) Asia Pacific Department.
While “in recent years India has made very impressive progress in reforms,” he said that “looking ahead there are important policy priorities” and listed three among them.
“One, is to continue improvements in product and labour market reforms with a focus on increasing formal female labour participation to improve the business environment, and reduce complex regulations, but also to address supply bottlenecks, particularly in the agricultural sector and distribution networks,” Kang said at a news conference on Friday in Washington.
As one of India’s major reform achievements, he mentioned the “introduction of flexible inflation targeting and of a statutory monetary policy which has helped to strengthen the monetary policy framework.”
The Reserve Bank of India Act was amended in 2016, to provide for a Monetary Policy Committee that decides on the interest rate required for achieving the inflation target set by the government in consultation with the bank.
The other achievements include the Goods and Services Tax (GST) and the “major recapitalisation plan for the public-sector banks in order to accelerate the work out of nonperforming loans, as well as made some important legal improvements through a new insolvency and bankruptcy law,” Kang said.
“We expect and hope that the reform momentum continues,” he added.
“We are not saying that India’s structural reform speed will slow down because of elections,” Changyong Rhee, the IMF director of the Asia Pacific Department said.
“What we are saying is that the growth momentum and the structural reform momentum should continue despite the election period. So there is something misquoted,” he added.
On Thursday, IMF Managing Director Christine Lagarde had said at a news conference on Thursday, according to the IMF transcript: “We have seen and we are seeing — I am not sure that we will be seeing in the next few months given the elections that are coming up — major reforms that we had recommended and advocated for a long time.”
(Arul Louis can be reached at arul.l@ians.in)
—IANS
by admin | May 25, 2021 | Economy, Markets, News
By Porisma P. Gogoi,
Mumbai : Revival in corporate earnings, along with the country’s healthy economic growth outlook projected by the International Monetary Fund (IMF) and massive inflow of foreign funds kept the bulls riding in the Indian equity markets during the truncated trade week ended Thursday.
However, the key indices took a breather on the last trading day (Thursday) and closed in the red — snapping a six-day gaining streak — as investors booked profits amid higher crude oil prices and caution over January derivatives expiry, market observers said.
Nevertheless, it was the eighth consecutive week of gains for the benchmark indices.
The barometer 30-scrip Sensitive Index (Sensex), which crossed the psychologically important 36,000-mark during the week, surged by 538.86 points or 1.52 per cent to close at 36,050.44 points.
The wider Nifty50 of the National Stock Exchange (NSE) crossed the 11,000-points-level for the first time during the week and closed Thursday’s trade at 11,069.65 points — up 174.95 points or 1.60 per cent from its previous week’s close.
The indices scaled new records during the week.
On January 24, the BSE Sensex closed at a new high of 36,161.64 points after scaling a new high of 36,268.19 points during the intra-day trade.
On the same day, the Nifty50 closed at a new high of 11,086 points, after it scaled a fresh intra-day high of 11,110.10 points.
“Markets got a boost in the backdrop of budget expectations apart from positivity among investors on account of trade talks being held at Davos,” D.K. Aggarwal, Chairman and Managing Director of SMC Investments and Advisors, told IANS.
“Also, the bulls got support after government announced that it would infuse Rs 88,139 crore into 20 public sector banks through recapitalisation bonds and budgetary support in this financial year. The aim of the government is to strengthen these banks’ lending capacity and thereby pulling the country out of a three-year low credit growth,” he added.
The government on Wednesday announced plans to infuse over Rs 1 lakh crore, including Rs 80,000 crore through recap bonds and Rs 8,139 crore as budgetary support, during the current fiscal seeking to perk up public sector banks (PSBs) that have been hit by huge non-performing assets.
“Post re-capitalisation allocation worth Rs 880 billion, PSBs corrected. However, private bank and infra stocks gained,” Arpit Jain, AVP at Arihant Capital Markets, told IANS.
“FIIs (foreign institutional investors) were net buyers during the month of January worth $1 billion,” said Jain.
On the investment side, provisional figures from the stock exchanges showed that FIIs purchased scrips worth Rs 4,510.59 crore, while domestic institutional investors divested stocks worth Rs 1,452.38 crore during the week.
Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors bought equities worth Rs 5,990.74 crore, or $939.38 million, during January 22-25.
According to Vinod Nair, Head of Research, Geojit Financial Services, positive global cues and revival in earnings supported the underlying sentiments.
“The rally was broadbased led by IT, oil and gas, financials, metals, pharma and PSBs. In the latest World Economic Outlook, the IMF has projected India’s GDP to grow at 7.8 per cent which helped the investor sentiments,” said Nair.
“F&O (futures and options ) expiry, long weekend, oil prices at three year at $71/bbl, lack of fresh triggers post a series of new high and sell-off in PSB stocks limited gains for the week,” he added.
On the currency front, the rupee strengthened by 30 paise to close at 63.55 against the US dollar from its last week’s close at 63.85.
The top weekly Sensex gainers were: ONGC (up 7.32 per cent at Rs 208.25); Tata Consultancy Services (up 7.14 per cent at Rs 3,117.85); Yes Bank (up 6.83 per cent at Rs 363.50); Coal India (up 5.85 per cent at Rs 299.65); and Adani Ports (up 5.61 per cent at Rs 437.60).
The losers were: Bharti Airtel (down 8.47 per cent at Rs 452.60); Tata Motors (DVR)(down 6.10 per cent at Rs 228); Tata Motors (down 4.44 per cent at Rs 400.20); Wipro (down 4.32 per cent at Rs 311.95); and Asian Paints (down 3.36 per cent at Rs 1,149.75).
The equity markets were closed on January 26 (Friday) for Republic Day.
(Porisma P. Gogoi can be contacted at porisma.g@ians.in)
—IANS
by admin | May 25, 2021 | Business Summit, Events, Muslim World
Riyadh : The Saudi capital Riyadh will host on Tuesday the A-list of global corporate leadership in the most keenly awaited business gathering of the year.
Dozens of the biggest names in global business have arrived in the Kingdom for the Future Investment Initiative (FII), which is being hosted by the Public Investment Fund (PIF), the body that is spearheading a slew of economic reforms. Crown Prince Muhammad bin Salman, deputy premier and minister of defense, will inaugurate the investment summit.
The high-profile FII is being held under the patronage of Custodian of the Two Holy Mosques King Salman.
International Monetary Fund (IMF) Chief Christine Lagarde and BlackRock boss Larry Fink are among those attending the event, which is being called the “Saudi Davos” a reference to the Swiss town that hosts the main World Economic Forum meeting each year, Arab News reported.
“We see FII as a unique opportunity for the global community to bring together aspirational thinking around the future of the world economy,” said Pedro Oliveira, Oliver Wyman’s regional managing partner.
Saudi Arabia is undergoing unprecedented economic and social reforms as the Kingdom seeks to reduce reliance on oil and gas revenues while creating thousands of new jobs for a youthful population.
The FII will see “internationally-renowned business leaders and influencers discuss … how the challenges of the future can be addressed,” said PIF Managing Director Yasir Othman Al-Rumayyan.
Bankers and fund managers in the audience will be especially interested to hear about the planned initial public offering (IPO) of Saudi Aramco, the national oil company.
Aramco CEO Amin Nasser will be among the homegrown business heavyweights at the conference. On Monday, he quashed market rumors about possible delays to the planned IPO, which could raise $100 billion from investors.
“We have always said that we will be listing in 2018, and to be more specific, in the second half of 2018,” he told CNBC in an interview.
He added: “The IPO is on track. The listing venue will be discussed and shared in due course.”
The Aramco IPO is being seen as a touchstone for wider financial reforms that is drawing interest from the world’s biggest money managers — many of them attending the three-day event in Riyadh.
It has spurred interest from several international banks and rating agencies have set up operations in the kingdom in anticipation of a flood of new deals.
One of them is S&P Global Ratings, a credit ratings agency that assesses the creditworthiness of companies and countries seeking to raise debt.
S&P said on Monday it has opened a branch in Riyadh, making it the first international credit rating agency to be fully licensed to operate in Saudi Arabia.
Companies in Saudi Arabia have typically used bank loans to meet their financing needs, but that is expected to change. “As Saudi Arabia’s capital markets evolve to match the size of the country’s economy, there is a prime potential for greater debt issuance,” said Meshari Al-Khaled, the newly appointed S&P office head in Riyadh.
—OIC-UNA/IINA
by admin | May 25, 2021 | Economy, News, World
Washington : The global economy will expand faster next year while still facing challenges, such as low productivity, high income inequality and low inflation, according to a senior International Monetary Fund (IMF) official.
“The most recent IMF forecast, issued in July, projected global growth at 3.5 per cent this year and 3.6 per cent in 2018… The Fund will issue its next World Economic Outlook in a week, and there is every reason to see these trends continuing,”Zhang Tao, deputy managing director of the IMF, said on Monday.
Zhang said the IMF’s emergency lending has declined as countries have found their financial footing again as the impact of the global crisis fades, reports Xinhua news agency.
However, he warned of the challenges the global economy is still facing, such as low productivity growth, income polarisation in some advanced economies, and low inflation.
“Innovation has reshaped labour and product markets. However, this disruptive change has taken place without an apparent increase in productivity,” said Zhang.
Low productivity growth has also contributed to the rise of income inequality in advanced economies, because it has become more difficult to raise living standards due to low productivity, according to the official.
Another challenge facing the global economy is low inflation linked to the low level of wage growth, said Zhang.
He attributed low wage growth to structural forecasts, such as weak productivity growth, aging population and the increasing consolidation of companies.
“Achieving stronger growth will require the right combination of policies, especially to reinforce labour and capital markets,” said Zhang.
He called for a range of reforms to improve efficiency and competitiveness of the global economy.
—IANS
