Economy

By Anirban Nag and Vrishti Beniwal India’s Prime Minister Narendra Modi is putting the flagging economy back on center stage after announcing the biggest privatization drive in more than a decade and making renewed attempts to ring fence the crisis-ridden shadow banking sector. The country is in the midst of a deepening slowdown amid waning consumption -- the bedrock of the $2.7 trillion economy. And while Modi has targeted transforming India into a $5 trillion economy by 2025. On Wednesday, Indian authorities went on an overdrive. The government decided to sell its entire stake in the country’s second-largest state refiner, and its biggest shipping company. It also approved a proposal to pare stakes below 51% in some companies and pushed for an introduction of a new industrial code bill. Meanwhile India’s central bank seized a troubled shadow lender to try and contain defaults from spreading in Asia’s third-largest economy. “This is Modi’s … [Read more...] about Government brings India’s economy into focus amid privatization push

Claiming that India will need another 22 years of sustained growth to become a “developed country,” former Reserve Bank of India (RBI) governor C Rangarajan said on Thursday that at the current growth rate, India becoming a USD 5 trillion economy by 2025 is “simply out of question.” “People are talking about USD 5 trillion economy. Today India’s economy is about USD 2.7 trillion and we are talking about doubling this. The required rate of growth of the economy to achieve the level of USD 5 trillion by 2025 is in excess of 9 percent per annum. Reaching USD 5 trillion by 2025 is simply out of question. You have lost two years. This year it is going to be six percent growth and next year also it will be probably about seven percent. Thereafter the economy may pick up,” said Rangarajan while delivering the 7th Yasaswy Memorial Lecture organised by IBS-ICFAI Business School on the topic, “The Current Economic Situation.” “The … [Read more...] about India becoming $5 trillion economy by 2025 ‘simply out of question’: Ex-RBI Governor C Rangarajan

Video PlayerClose YEREVAN, July 22 (Xinhua) -- China's gross domestic product grew by 6.3 percent year-on-year in the first half of 2019, which is quite impressive, Armenia's former Prime Minister Hrant Bagratyan said here recently. Bagratyan, who is also a well-known economist in the country, said in an exclusive interview with Xinhua that the Chinese economy maintains good growth momentum against the backdrop of challenging and complex conditions, including the U.S.-initiated trade tensions. The former prime minister said China had masterfully used a number of its advantages to build a strong economy. First of them is a huge domestic market, while the second is the relatively highly qualified, skillful and industrious workforce in the country. Third, China is able to provide the world with the best consumer goods regarding both good quality and competitive prices, he said. "China's economy has shown significant growth momentum. Almost all the fields including industry, … [Read more...] about Interview: China’s economy sees impressive growth in H1: Armenian ex-PM

Video PlayerClose WASHINGTON, Nov. 20 (Xinhua) -- Trade uncertainty has been a major factor weighing on the U.S. economy over the past year, a senior Federal Reserve official said on Wednesday. "Trade uncertainty has been a major theme and we see it in the decline in business investment, we see it on exports and we see it in the manufacturing sector," Fed Governor Lael Brainard said in an interview with CNBC. The Fed official noted that the prospect of U.S.-China trade talks is one of the factors she is taking into account for her outlook of the U.S. economy. "Even a truce would be a significant reduction in uncertainty for a lot of businesses around the country that are sitting on the sidelines in terms of investment," she said. Brainard also said she would like to see how the interest rate cuts ripple through the U.S. economy before making further changes to monetary policy. "The committee has a pretty substantial adjustment in the path of rates over the past few meetings," … [Read more...] about U.S. Fed official says trade uncertainty major factor weighing on economy

Rich valuations of the Indian market are at odds with the weak state of the economy and so is the large price-value gap among growth and value stocks. The market and the quality part of it are largely factoring in a reasonable recovery in the economy and earnings. However, given the structural issues faced by the economy, a quick recovery seems improbable. Earnings may, however, recover faster due to lower corporate tax rates and lower-than-anticipated loan loss provisions for banks. The economy seems to be at a low while the market appears to be on a high. Nifty is trading at 22.5 times FY20 earnings on a free-float basis and seems to be factoring in economic recovery and an improvement in earnings. The economic recovery, however, seems challenging in the near term due to several structural issues, very limited space available on the fiscal front to support either consumption or investment demand and inefficacy of policy rates given the high level of government borrowing, leading to … [Read more...] about Dichotomy between markets & economy? Just live with it