สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 23 มกราคม 2557

India good place to do business, says experts at WEF

Reposing faith in India's growth story, leaders gathered at the World Economic Forum (WEF) today said the country remains a good place to do business and its fundamentals are quite strong. The optimistic views about India were discussed at the session 'The India Outlook', that also saw the participation of Finance Minister P Chidambaram. Japanese financial major Nomura's CEO (EMEA) Jeremy Bennett said that India still remains a great place to do business. Noted economist Thomas Friedman said he was hugely optimistic about India even though the country is facing big challenges. Participating in the discussions, Chidambaram said in India there are different layers of decision making, then there are courts that can strike down the decision and "we also have street protests". According to Friedman, India's culture of education is a real asset. Hoping that upcoming elections in India are able to produce a government that delivers, he said there may be noise and all messiness around, but still things can move ahead.

(Source: Economic Times)

Worst is over for our economy, growth to touch 5.5%: Moody’s

The worst is over for India's economy, though growth may reach its potential only next year, with GDP expansion likely to touch 5 to 5.5% this year and more than 6 percent in 2015, Moody's Analytics said. Prospects about the forthcoming general elections may lift business confidence and will be the trigger for the economy, which has stabilised after downside risks eased with the rupee and current account issues under control. "The economy has stabilised in recent quarters, though GDP growth remains well below potential. Downside risks have receded. The rupee is less vulnerable to the US Fed tapering than it was in 2013. The economy will slowly improve across 2014 but not hit potential until well into 2015," the agency said in a report titled India Outlook: Steady Growth, Lower Risk. Moody's Analytics is a division of Moody's Corporation that is engaged in economic research and analysis. The report is independent and does not reflect the opinions of its credit-rating wing, Moody's Investors Service. Basing its optimism on better-than-expected third-quarter growth (Q2 of FY14), the report said the economy should steadily improve in the coming quarters as downside risks have started to recede. On the rupee, which was one of the worst performers among Asian currencies last year, losing 11% after plunging over 30% earlier, the report said the local currency is now less exposed to external worries with the CAD being brought under control.On prices, it said lower inflation will help to lift business confidence.

(Source: Financial Express)

Success depends on fiscal consolidation

The major recommendation of this report is migration to a rule-based framework to make monetary policy-making more predictable and reduce uncertainties in business planning. As monetary policy, to a great extent, deals with management of inflation expectations, the choice of the new Consumer Price Index (combined) as the measure of the nominal anchor makes perfect sense. However, given the current weaknesses in economic activity and supply constraints, a transition path is recommended before the ultimate target of inflation at four per cent (give or take two per cent) is achieved in two years. To improve credibility and transparency in policy-setting, a committee-based approach, similar to that in the US and the UK, is recommended, with published minutes and voting records. The suggested operating framework will focus on the development of the term repo market/yield curve, so as to reduce, albeit in a gradual fashion, the dependence of banks on RBI for their short-term cash management. The report has duly considered the imperatives of fiscal discipline and the Basel-III framework and recommended a roadmap for Statutory Liquidity Ratio reduction consistent with the path of fiscal consolidation (fiscal deficit to fall to three per cent of gross domestic product by FY17) and the requirements of the liquidity coverage ratio. The success of the new framework critically depends on the government's dedicated commitment to fiscal consolidation and structural reforms.

(Source: Business Standard)

Bangkok tremors turn tourist tide to India

The ongoing political strife in Bangkok, the capital of Thailand, and the Thai government's decision to impose a state of emergency in its capital in response to anti-government protests that have paralysed the city is turning out to be a boon for India vis-a-vis tourism. Due to the escalation of violence in Bangkok since the last week, foreign tourists are shifting their plans to India. “We are receiving queries from foreign tourists, specially from Europe. India being close to Bangkok, coupled with economic viability, is helping cornering foreign tourists who are changing their plans,” said Gour Kanjilal, executive director, Indian Association of Tour Operators (IATO), which has over 6,500 members across the country. Political volatility has been on the rise in Bangkok, specially in the past few days. A couple of bomb blasts took place in the capital amidst wide protests. Protesters have been trying for more than two months to bring down the government. The Indian embassy in Thailand too is continuously tracking the situation and coming up with updates. “This is being seen as a new trend. Global traffic at times does go through such shifts when violence/political protest takes place in any popular tourist destination,” said one of the senior officials of a leading travel company. While Bangkok is one of the most popular destinations in Asia, India enjoys the advantage of being a country with a wide range of attractions. Other popular destinations like Singapore and Malaysia are also gaining due to the rising problems in Bangkok.

(Source: Business Standard)

Economic Section

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