NEW DELHI — India’s economy likely rebounded in the April-June quarter from a deep slump last year helped by improved manufacturing and in spite of a devastating second wave of COVID-19 cases.
Asia’s third-largest economy suffered one of the biggest hits among major economies, contracting 7.3% in 2020/21, after a nationwide lockdown early last year. But the economy has not been as badly affected from the second wave in April-May this year due to less stringent lockdowns by state governments.
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However, many analysts say the risk of spiking infections from the Delta variant and the slow pace of vaccinations in some states could hit India’s growth momentum, with the economy unlikely to reach its pre-pandemic level of about $2.9 trillion before the middle of next fiscal year beginning April.
A Reuters survey of 41 economists projected gross domestic product grew 20.0% in the June quarter from a year earlier, versus a record contraction of 24.4% in the same quarter a year earlier.
If the median poll forecast is realized, it would be the fastest growth since the mid-1990s when official quarterly data was available, and up sharply from 1.6% in the previous quarter.
The Reserve Bank of India https://www.reuters.com/world/india/india-keeps-rates-hold-expected-market-eyes-clues-policy-normalization-2021-08-06(RBI), which has kept its monetary policy loose, has forecast annual growth of 9.5% in the current fiscal year, although it has warned about the possibility of a third wave https://www.reuters.com/world/india/indian-states-preparing-next-covid-wave-focus-children-2021-08-19 of the pandemic.
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Many sectors like retail, auto sales, farm output, construction and exports have picked up since June, supporting the government’s claim of a fast recovery, but some sectors such as transport, tourism and consumer spending remain weak.
“Nearly one million of about 4 million trucks plying long-distance cargo are still off the road, hit by a closure of many businesses and a recent surge in virus cases in the state of Kerala https://www.reuters.com/world/the-great-reboot/keralas-covid-19-lessons-india-modis-government-2021-08-26 and neighboring Tamil Nadu,” said Anjani Mandal, CEO of Bengaluru-based Fortigo Logistics.
A spike in cases of the more transmissible Delta variant has caused supply chain disruptions for many manufacturers, which could weigh on factory output and add to gloom for an already fragile recovery, he said. Unlike advanced economies, which announced massive stimulus to support consumers, Prime Minister Narendra Modi opted for raising spending on infrastructure, privatization https://www.reuters.com/world/india/india-puts-life-insurance-corps-ipo-fast-track-2021-08-27 of state companies and tax reforms https://www.reuters.com/world/india/india-proposes-refunds-retrospective-tax-disputes-2021-08-05/#:~:text=The%20amendment%20to%20the%20tax,South%20Asian%20economy%2C%20analysts%20said to bolster mid-term growth prospects, while providing free foodgrains to the poor.
“The government’s measures, if successful, could put the economy on a high growth path of 7.5-8% in coming years,” said N.R. Bhanumurthy, vice-chancellor, Bengaluru Ambedkar School of Economics University, while forewarning of short-term risks this year.
($1 = 73.4875 Indian rupees) (Editing by Jacqueline Wong)
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
