FISCAL POLICYMAKING
Path towards structural reforms and fiscal prudence will continue in Budget 2024: Navneet Munot
Markets are at a new high. It is definitely a cause of celebration. It reflects India's macroeconomic fundamentals. It reflects that India has got political stability, macroeconomic stability, financial stability. There is tremendous faith on the government's policy continuity.
Pakistan's National Assembly passes Rs 18,877 billion budget for fiscal 2024-25
The budget, facing opposition, sets growth targets and tax revenue goals while addressing concerns about IMF loans and tax exemptions to aid economic growth.
Stars aligning to create a pathway for corporate India to borrow cheaper: Lakshmi Iyer
No, clearly, if you are looking at the current scenario, whether it is on the fiscal front, whether it is on the inflation front, or whether it is on the flow front, in terms of creating another additional demand lever, the stars seem to be aligned to ensure that the confluence of all of these factors are set to drive interest rates lower further. Of course, we need to have the icing on the cake, which is the policymaking from the central banker, which obviously is impending and may not really manifest itself in a big hurry.
China's fiscal revenue drops 2.8% in January-May
China's fiscal revenue declined by 2.8% in the first five months of 2024 compared to the same period last year, reflecting a deepening economic slowdown. Weak demand continued to weigh on the recovery, with fiscal expenditure rising by 3.4% during the same period. In May alone, fiscal revenue was down by 3.2% year-on-year, while fiscal spending grew by 2.6%. China has pledged greater fiscal stimulus to support its economy, including the issuance of special treasury bonds and incentives to boost consumer spending.
Modi premium for Indian stocks gets a hard look after elections
With the leader now navigating coalition politics after a weaker-than-expected mandate in this week’s national election, the so-called Modi premium is under scrutiny. Investors are looking for proof that Modi can continue his reforms with the same vigor, while balancing the demands of alliance partners and avoiding populist measures to regain public support.
New govt may cut FY25 fiscal deficit target amid robust growth and windfall RBI dividend
In the interim budget in February, the government had set the FY25 fiscal deficit goal at 5.1% of GDP and revised the FY24 target to 5.8%. However, the actual fiscal gap for FY24 was contained at 5.6%. With exit polls projecting Prime Minister Narendra Modi to retain power with a strong majority, policy continuity is expected, and the government may aim to further improve the fiscal deficit target for the upcoming fiscal year starting April 1, 2025.
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India’s economic momentum to remain strong post-election: S&P Global Market Intelligence
India's post-election economic momentum is expected to be driven by capital spending, private consumption, and investment. S&P Global Market Intelligence highlights strategic sectors like renewables, electronics, and logistics. Inflation is projected to ease, and if the NDA secures a two-thirds majority, the focus will be on economic growth and fiscal deficit reduction. Technology integration and social welfare are key considerations depending on the election outcome.
The economy looks good — here's what India needs, to get straight ‘A’s over the long term
To begin with, it is sensible to see growth in conjunction with inflation data, especially inflation that has been shorn of volatile components, such as food and fuel. This adjusted, or core, inflation has been dropping steadily over H2 2023-24, down to 3.3% in February, suggesting that even with such high growth rates, the economy has not 'overheated'.
Near-term markets may be range-bound or slightly down: Rahul Chadha
Rahul Chadha says: "In broad consumption space, things are looking soft. In the last three-six months, we have seen all the tightness happening on the unsecured lending also. So, we will see some pressure. But within a long structural cycle, there will be mini cycles which will give good entry points for long-term investors. We want the dips and some bit of a softness so that valuations correct and you can deploy long-term money."
Budget 2024: Trade, taxes, and potential transformations awaiting in India's fiscal strategy
Budget 2024: India's 2024 budget announcement has the potential to bring about significant changes in cross-border trade finance. This budget holds immense importance for companies engaged in international trade, as it could impact trade policies and financing options. One notable positive development expected is the revision of the 'Inverted Duty Structure', which has been adversely affecting domestic industries' competitiveness and profitability.
Can India adopt a G20-style inclusive model for economic reforms?
By imbibing the successful features of G20, we have an opportunity to democratise the way policies are identified, debated, adopted and implemented in India. In doing so, instead of clearing the road blocks, Modi can put the economy on an expressway to a 'Developed India' destination by 2047.
ETMarkets Smart Talk: If you plan to invest Rs 10 lakh ahead of Budget 2024, deploy it over 6 months: Rohit Sarin
As we approach the Interim Budget 2024 or the Vote on Account, the Indian markets are expected to remain strong in 2024 aided by the reallocation of global liquidity towards equity, with the government's policy stance aligned with this momentum. The Indian market is well-positioned for continued growth, although it may remain volatile in the near term. India's fiscal deficit and current account deficit are in line with goals. India's economic indicators reveal sustained growth rates, making it an appealing investment destination.
Fed pivot will dominate year of rate cuts in turn of global cycle
The US Federal Reserve will lead the pivot for richer countries after its policy makers signaled 75 basis points of cuts for the year, marking an abrupt shift from previous warnings that rates could still go higher through much of 2024.
Wall Street's China stock bulls keep hopes alive for 2024
Global investment banks turned almost unanimously optimistic on the market around this time last year, only to be confounded by a 14% drop in the MSCI China Index.
Fitch 'neutral' on China, flags realty risks
China's economic growth will moderate to 4.6% next year from 5.3% in 2023, the ratings agency said in a Wednesday report titled "Greater China Outlook 2024." While a greater usage of fiscal policy will limit downside risks, Fitch noted such supports may keep fiscal deficits wide at a time when the country's fiscal metrics have already eroded compared to peers with similar sovereign ratings.
Indian policymakers, investors need to remain cautious amid rising US rates and treasury yields
Growth in the US has been boosted by a doubling of the federal fiscal deficit, from $1 trillion in the previous year to $2 trillion in FY ended September 2023. This increase in estimated supply of bonds would then keep yields on US government bonds elevated. In addition to raising interest costs for the government and affecting borrowing rates in the US, the yield on US government bonds also drives up rates for a substantial part of global cross-border capital flows. This is textbook 'crowding out'. Given that it is the US, the impact is being felt globally.
Economic policymakers need a new playbook to tackle unexpected shocks
Economists and policymakers must recognise that the world is changing and reset the existing models that guide decisions. The notion of a shock is new to macroeconomics. However, there is an implicit assumption that these are infrequent and transmitted largely through financial channels.
Inflation may come down to 4% by 2nd quarter of FY25.: B Prasanna
Hopefully not the 6% handle and after that we will see over the next one year inflation coming down to the 4% handle in quarter two of FY25.
US government shutdown later this year would not hurt rating: Fitch
the latest factor to prompt worry on Wall Street about U.S. political governance after a near-miss with a partial federal government shutdown this weekend and a debt ceiling crisis earlier this year.
Dollar stands tall as US economic resilience trumps fiscal uncertainty
The Japanese currency has come under pressure this week even as the Bank of Japan on Friday loosened its grip on interest rates. Policymakers have also been quick to pushback against speculation that the move was a prelude to an imminent exit of the central bank's ultra-easy policy.
US on 'very narrow path' to avoid recession: IMF chief economist Pierre-Olivier Gourinchas
"A recession is not in our baseline," Pierre-Olivier Gourinchas told AFP during an interview at the IMF's headquarters in Washington, ahead of the publication of its updated global growth projections on Tuesday.We are cautiously prudent that the US economy could avoid a recession and, you know, glide towards its inflation target without having a recession in its future," he said.
China's fiscal revenue growth slows, signals broadening economic pressure
China's fiscal revenue increased by 13.3% YoY in the first six months of 2021, compared to a 14.9% rise in the previous five months, according to the latest data. This indicates that China's efforts to reign in growth have broadened, amid weaker demand at home and abroad.
OECD raises India's FY24 growth forecast a jot to 6%
OECD expects 4.8% inflation in India in FY24, a full percentage point below its previous projection and slower than Reserve Bank of India's forecast of 5.2%. With inflation easing, it predicts RBI will make at most one more small rate hike this calendar year and start lowering rates mid-2024.
ET Awards: India Inc needs to step on the capex pedal for growth, say top industrialists and policymakers
Indian private sector must boost capital expenditure to support sustainable, long-term growth and job creation, according to industry leaders and policymakers. Speaking at the Economic Times Awards for Corporate Excellence in Mumbai, Amitabh Kant, Uday Kotak, Sanjiv Mehta, Sajjan Jindal and Preetha Reddy said services provide a strategic advantage, but manufacturing needed to fire. The investment could encourage greater support for R&D and India becoming a reserve currency of the world, said the panel.
Tug of War! The disagreement between stock market and monetary policymakers
The US Fed started to increase rates in early 2022, taking and the total interest rate up by 450 bps. The current FED rate is 4.75%.
Now is the time for policymaking aimed at insulating the Indian economy from global shocks
The global environment seems to have turned less hostile as inflation rates have peaked in advanced economies and oil prices have stabilised at lower levels. So capital flows have started returning to India, the exchange rate is bouncing back and forex reserves are being rebuilt.
The perception about India is visibly changing
The difference is evident in the impact of Quantitative Tightening (QT) in 2013 and in 2022. During QT 2013, rupee depreciated by 24% against the US dollar even while other major currencies had appreciated against the dollar. Fast forward to 2022 - the situation appears to be quite in control on inflation, currency and fiscal front. This time the depreciation of rupee has been comparatively moderate, more reasonable, and gradual despite the appreciation of dollar against most other currencies.
Fed policymakers press ahead with inflation fight, even with markets in turmoil
While "no one knows for sure" if there is a big problem lurking in the financial sector right now, "so far, we haven't seen the kind of market dysfunction, even through what's happening in the global markets right now, we haven't seen that in the U.S. markets," Mester said.
Indian economy grew 13.5% against RBI's forecast; what policymakers should do for the recovery
Demand revived in consumption, whose share climbed 5.9 percentage points to reach 59.9% of GDP, while investment demand rose by a more modest 1.9 percentage points to 34.7%. Exports held their share, but elevated energy prices swelled imports, which gained 5.3 percentage points. Government expenditure declined in terms of GDP share, which points to tighter control also reflecting in the fiscal deficit numbers.
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