India’s economy is on track for its slowest growth since at least 2013, weighed down by a shadow banking crisis, weak investment and a slump in spending.
Gross domestic product will grow 5% in the year through March 2020, the Statistics Ministry said in a statement in New Delhi on Tuesday. That is in line with the median estimate in a Bloomberg survey of 22 economists and compares with 6.8% expansion in the previous year.
That pace will place India, which was the world’s fastest-growing major economy last year, behind regional peers like China, Vietnam and the Philippines, all of which are seen expanding close to 6% or more.
Key points from Tuesday’s GDP estimate:
Gross value added, a key input of GDP that strips out the impact of taxes on products, is forecast to increase 4.9%, compared with 6.6% expansion last fiscal year.
Manufacturing output is estimated to rise 2%, compared with 6.9% growth last year.
Agriculture is seen growing 2.8%, against 2.9% expansion a year ago.
To boost growth, the central bank cut interest rates five times last year and Prime Minister Narendra Modi’s government lowered taxes for companies.
But there’s been little sign of a revival in investment or a pick-up in consumer demand. The Reserve Bank of India last month reduced its own full-year growth estimate to 5%, which will be the slowest pace since the year ended March 2013, after the methodology for calculating national output was changed.
There are no surprises, said Madhavi Arora, an economist at Edelweiss Securities in Mumbai. She sees improvement in the remaining two quarters, with the global manufacturing picture showing improvement and base effect seen helping growth numbers.
The International Monetary Fund is separately set to lower India’s growth forecast this month, after previously forecasting 6.1% expansion. Poor business sentiment and declining rural consumption are among reasons for weakness in the economy, the IMF’s Chief Economist Gita Gopinath said last month.
The slump in consumption, which makes up about 60% of GDP, can be attributed in part to a crisis among shadow lenders and a build-up of bad loans at banks, which in turn curbed lending in the economy. Waning consumer confidence amid unemployment at a more than four-decade high also hurt activity.
With the room for more central bank stimulus closing as inflation quickens, the focus shifts to Finance Minister Nirmala Sitharaman’s annual budget, scheduled for Feb. 1.
–With assistance from Tomoko Sato and Abhay Singh.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
