India, despite its economic growth slowing to 4.4% in the December 2022 quarter, is the world’s fastest-growing major economy. But that will be a difficult lead to keep for long amid high interest rates and subdued demand.
The three months ending in December were India’s slowest in three quarters. It had grown 6.3% in the one before that and 13.2% in the June quarter, data released yesterday (Feb. 28) show.
Read more
This slowdown was caused primarily by slowing manufacturing activity, weaker personal consumption, and lower government expenditure. The negative growth in manufacturing indicated rising input costs.
What are the immediate challenges to India’s growth?
To achieve its full-year growth target of 7%, India needs to grow at 5.1% at least—the Reserve Bank of India’s projection is only 4.2%—in the current quarter, analysts estimate.
Economists at QuantEco Research expect growth to moderate to 6% as post-covid-19 pent-up demand fizzles out. A drawdown in government revenues and higher interest rates have curbed capital expenditure, too. Add to that the disruptions caused by the Ukraine war and the global slowdown.
The challenges that lie ahead for India’s economy include inflation, the continuing global slowdown, and a further weakening of the post-pandemic spurt.
Consumer prices have been on the rise for nearly a year, affecting Indians’ purchasing power. Aggressive interest rate hikes by the RBI to tame inflation have also hit demand. Yet, retail inflation rose to 6.52% in January, breaching the central bank’s upper threshold for the first time in three months.
Worsening it all is the global inflationary trend fueled by the supply chain disruption caused by the Ukraine war.
All this has dampened consumption which, since the pandemic ended, has been cruising along on pent-up demand. That phase is now over.
“We believe that overall growth momentum is softening, as pent-up demand from the lockdown period fades, exports weaken, and tighter fiscal and monetary policy rate take their toll. We expect GDP growth to slow from 6.8% in the financial year 2023 to 5.5% in the financial year 2024,” Pranjul Bhandari, chief India economist at HSBC, told The Indian Express.
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.
