Daily News - Wednesday, 4 September 2024
WB raises growth forecast to 7% in FY25 (mint)
The World Bank revised India's FY25 growth forecast to 7%, up from 6.6%, driven by increased infrastructure spending, robust household investments in real estate, and strong private consumption. The bank remains optimistic about India's medium-term prospects, noting that the debt-to-GDP ratio could decrease from 83.9% in FY24 to 82% by FY27, with the current account deficit staying between 1% and 1.6% of GDP. Despite global economic challenges, India demonstrated remarkable resilience, achieving 8.2% growth in FY24, making it the fastest-growing major economy in the world.
Sberbank says India business fine despite West’s sanctions (mint)
Russia's trade with India has surged, nearly doubling to $65 billion in 2023, largely driven by India's increased imports of Russian oil following Western sanctions on Moscow. Sberbank, which handles payments for up to 70% of Russian exports to India, reports smooth bilateral transactions in rupees and roubles, despite facing restrictions in other markets due to Western sanctions. The bank has seen a significant rise in interest from Russian businesses in the Indian market, with no issues in operating within Indian payment systems, and the previous surplus of rupees held by Russian companies has been resolved.
India’s palm oil imports decrease 27% (The Asian Age)
India's palm oil imports in August dropped by 27% compared to the previous month due to ample stockpiles and negative refining margins, which discouraged purchases. The reduced demand from the world's largest vegetable oil importer could lead to higher palm oil inventories in major producing countries like Indonesia and Malaysia, potentially impacting benchmark futures. The recent price increase in palm oil made it as expensive as soybean oil, eliminating the usual price advantage and further reducing the incentive for refiners to import it.
National financial information registry Bill almost ready: Seth (Financial Express)
The bill to establish a National Financial Information Registry (NFIR), aimed at streamlining credit appraisal and reducing loan costs, is nearly complete, according to Economic Affairs Secretary Ajay Seth. NFIR will provide a comprehensive information system for lending institutions, allowing them to access detailed data on borrowers with their consent, which could result in lower interest rates for those willing to share their financial information. To support sustained growth and achieve the vision of Viksit Bharat, the government is focused on expanding credit access, especially for MSMEs, deepening financial markets, and improving credit assessment, with the NFIR playing a critical role in enhancing the credit rating mechanism.
‘Investment rate of 36% needed for 8% GDP growth’ (Financial Express)
To achieve an 8% annual economic growth, India requires an investment rate of 36% of GDP, with a significant portion coming from domestic savings, according to PFRDA Chairman Deepak Mohanty. In FY25's first quarter, the investment rate stood at 34.8%, reflecting a growing trend of converting savings into capital, essential for sustaining high growth. Recent years have seen a shift in household financial behaviour, with a decrease in cash and bank deposits and an increase in investments in bonds, equities, and social security savings, highlighting a move towards risk-taking for wealth growth.
