ECONOMISTS EXPECTATIONS
Union Budget consultations done, Sitharaman set to announce measures and reforms on July 23
Budget expectations: Finance Minister Nirmala Sitharaman completed pre-Budget consultations with diverse stakeholders, setting the stage for presenting her seventh Union Budget on July 23. This first full budget of Modi's third term aims to steer India towards becoming a developed nation by 2047. President Murmu hinted at significant economic reforms ahead.
Can Modi government stick to interim numbers in upcoming Budget 2024? Here's what Sitharaman had to say
UNION BUDGET: Before the 2024 Lok Sabha elections, Finance Minister Nirmala Sitharaman had indicated that the BJP-led NDA government would adhere to the fiscal measures outlined in the Interim Budget, emphasizing fiscal prudence and continued capital expenditure. Re-elected for a third term, the Modi government’s budgetary focus includes a significant boost to infrastructure and renewable energy initiatives.
India's rating upgrade possible in next 24 months if fiscal deficit falls to 4%: S&P
India could receive a sovereign rating upgrade in the next 24 months if the central government manages its finances prudently and reduces the fiscal deficit to 4% of GDP. The trigger for the upgrade would be a general government deficit falling below 7% of the GDP, with a significant portion driven by the central government. The central government estimates a fiscal deficit of 5.1% of GDP in the current fiscal, down from 5.63% in 2023-24.
Budget 2024 may see Modi govt hiking rural housing subsidy by 50% following Lok Sabha disappointment
India plans a substantial increase in rural housing subsidies in the upcoming federal budget, potentially exceeding $6.5 billion, up by 50% from the previous year. This initiative aims to address rural economic distress and boost infrastructure spending including village roads and job programs, amid challenges in the agriculture sector and recent electoral setbacks for Prime Minister Narendra Modi's party.
US consumer confidence ebbs slightly in June
The Conference Board said that its consumer confidence index eased to 100.4 this month from a downwardly revised 101.3 in May. Economists polled by Reuters had forecast the index slipping to 100.0 from the previously reported 102.0.
How is the Budget prepared: Insights and expectations for this year
The Indian Union Budget preparation is a meticulous process overseen by the Ministry of Finance (MoF), involving NITI Aayog and other ministries. It begins around August-September, culminating in the February 1 presentation, in a non-General Election year. Defined by Article 112 of the Constitution, it forecasts revenues and expenditures, balancing fiscal prudence with developmental goals through circular issuance, revenue scrutiny, stakeholder consultations, allocation decisions, and the symbolic Halwa Ceremony.
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Budget expectation of farm sector: Spotlight on agri research, fertiliser subsidy, climate fight in meeting with FM
Budget 2024 expectations: Experts at the meeting advocated for the consolidation of all agriculture-related subsidies for transfer through Direct Benefit Transfer (DBT) and proposed a hike in the retail price of urea, unchanged since 2018. They also emphasized promoting bio-fertilisers and foliar fertilisers through subsidies.
Union Budget: India mulls income tax cuts in Budget as part of $6 billion consumer boost
India Budget Tax Expectations: India's government under Prime Minister Narendra Modi is considering measures worth over 500 billion rupees to boost consumption in the upcoming budget. This includes tax cuts for lower income individuals for the first time in seven years. The plan aims to target consumers with high propensity to spend amidst economic challenges.
Budget 2024: How about a 'Robot Tax' in Budget? Economists pitch the idea for AI-hit jobs
Union Budget: Economists discussed the upcoming Budget with Finance Minister Nirmala Sitharaman, focusing on growth, fiscal policy, investment, private sector involvement, food inflation, and debt. Key topics included the impact of AI on employment, 'robot tax' proposal, IMF recommendations, challenges faced by developing countries in adapting to AI technology, and insights from Gita Gopinath.
Economists bat for capex push, fiscal prudence and more jobs at pre-Budget meet
Budget 2024: The focus on the quality of spending, sans mindless freebies, and steps to further curb inflationary pressure should continue, some of the economists told finance minister Nirmala Sitharaman at the customary pre-budget consultation, advising against reckless giveaways. Successful tackling of inflation, they said, would be the biggest pro-poor move.
RBI economists call for higher private investments, warn rising food prices could derail disinflation process
RBI economists emphasize the need for higher private investments to drive growth amidst a disinflationary stance to manage spillover effects of elevated food prices, potentially delaying rate adjustments even if CPI hits target levels.
US import prices unexpectedly fall in May
Import prices dropped 0.4% last month after an unrevised 0.9% surge in April, the Labor Department's Bureau of Labor Statistics said on Friday. That was the first decline in import prices since December. Economists polled by Reuters had expected import prices, which exclude tariffs, to edge up 0.1%.
Bubble of all bubbles? US economist predicts a 2025 stock market crash, likely worse than 2008 crisis
Economist Dent warns of a 2025 stock market crash worse than 2008 crisis, attributing it to artificial bubble building post-Covid pandemic. He analyzes global economies, highlights economic devastation, and predicts a crash driven by inflated asset prices.
Economists expect big-bang reforms to continue under Modi 3.0
Modi is set to be sworn in for third term as India's Prime Minister in coalition government with key partners Telugu Desam Party and Janata Dal (United). Economists anticipate focus on economic reforms to achieve goal of Vikshit Bharat by 2047. Budget to prioritize infrastructure, manufacturing, and welfare schemes amid global economic challenges.
Upward GDP projection and no change in interest rates welcomed by industry and economists
Industry leaders and economists widely accepted RBI's monetary policy stand of no change in interest rates. Besides upward projection of GDP growth for FY25 from 7 per cent to 7.2 per cent is welcomed by the Industry.
Euro zone bond yields rise as ECB offers fuzzy outlook
"The Governing Council will continue to follow a data-dependent and meeting-by-meeting approach to determining the appropriate level and duration of restriction," the ECB said in a statement.
Lok Sabha Results: Will a fractured mandate for NDA impede new govt's infra and capex push?
The 2024 Lok Sabha elections deliver a fractured mandate, influencing economic reform outlook. Experts recommend focusing on public capex and high-tech sectors for growth. Tanvee Gupta Jain predicts fiscal leeway for populist spending, supported by progress in implementing labor laws.
Oil rises on strengthening Fed rate cut expectations
Oil prices rose in Asian trading on rising expectations of a Federal Reserve interest rate cut in September and a rebound from a selloff linked to growing U.S. inventories and an OPEC+ supply increase.
Modi retaining power under changed circumstances to make reforms challenging: Economists
Economists warn that PM Narendra Modi's retention in power after the general elections under 'changed circumstances' will pose challenges for implementing critical reforms.
April core sector grows 6.2%, IIP seen 6-6.5%
India's eight core infrastructure sector, including coal, crude oil, steel, cement, electricity, fertilisers, refinery products, and natural gas, grew 6.2% in April, up from 6% in the previous month. The sector's output slowed to 7.6% in FY24, with coal output up 7.5% and electricity generation rising 9.4%. Fertilizer production contracted 0.8% for the fourth consecutive month.
Fed's favourite underlying inflation gauge is seen cooling
Economists expect the personal consumption expenditures price index minus food and energy - due on Friday - to rise 0.2% in April. That would mark the smallest advance so far this year for the measure, which provides a better snapshot of underlying inflation.
U.S. existing home sales drop 1.9% in April, pushed lower by high rates and high prices
Existing home sales fell 1.9% to 4.14 million in April, with median prices rising to $407,600. Lawrence Yun expressed frustration over the sales drop.
UK inflation rate slows to 2.3% in April, lowest reading since July 2021
UK consumer prices rose 2.3 per cent annually in April, down from March's 3.2 per cent, hitting their lowest since July 2021. Prime Minister Rishi Sunak called it a significant economic moment. Despite this, inflation slightly exceeded Bank of England and Reuters forecasts. The BOE aims to stabilize prices at 2 per cent
US consumer prices rise 0.3% in April; core CPI slows
U.S. consumer prices rose less than expected in April, indicating a resumption of the downward trend in inflation at the beginning of the second quarter, which has bolstered financial market expectations for a potential interest rate cut in September. The consumer price index (CPI) increased by 0.3% last month, following advances of 0.4% in both March and February, according to data from the Labor Department's Bureau of Labor Statistics (BLS). On a year-on-year basis, the CPI rose by 3.4% in April, slightly lower than the 3.5% increase recorded in March.
Fed officials mull whether rates high enough as inflation expectations jump
In an interview with Reuters, Atlanta Fed President Raphael Bostic said he still thought inflation was likely to slow under the current monetary policy and allow the central bank to begin reducing its policy rate in 2024 - though perhaps by only a quarter of a percentage point and not until the final months of the year.
Why higher Fed rates are not totally off the table
Asked whether officials might raise interest rates again, he said he thought they probably would not -- but he also avoided fully ruling out the possibility. And when asked, twice, whether he thought rates were high enough to bring inflation fully under control, he twice tiptoed around the question.
India inflation likely slipped in April: Reuters poll
India's consumer price inflation is expected to ease to 4.80% in April, driven by persistent food inflation challenges. Economists foresee inflation remaining around 5% or higher in the coming months, with the RBI expected to cut interest rates next quarter.
US private payrolls beat expectations in April
The ADP Employment report revealed that U.S. private payrolls exceeded expectations in April, with an increase of 192,000 jobs, following an upward revision of 208,000 jobs in March. Economists had predicted a rise of 175,000 jobs for April. This report, developed with the Stanford Digital Economy Lab, often anticipates trends in the labor market, although it tends to show a more pronounced slowdown compared to official employment data.
Growth recovery not broad-based; expect RBI to cut rates at end of 2024: Economist
Rajani Sinha discusses the disparity in rural India's growth and the expectation of interest rate cuts. Concerns remain about broad-based growth recovery, but improvements in two-wheeler sales and consumer non-durables indicate possible convergence of rural and urban demand. Sinha further says "we expect RBI would look at interest rate cuts towards the end of this year."
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