Tag: India GDP

BCG anticipates FMCG volume uptick aided by stable pricing, more products

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Abheek Singhi, MD & Senior Partner of Boston Consulting Group (BCG) believes there could be an uptick in volumes for the fast moving consumer goods (FMCG) sector over the next 12 months.

“There is a set of supply-side or industry actions that will drive some of this growth in the next 6-12 months,” he said highlighting the softening of commodity prices, leading to less product price increases, and the industry’s focus in expanding product categories.

In its latest report on the FMCG industry, presented at the Confederation of Indian Industry’s (CII) FMCG Summit, BCG pointed out that the FMCG sector’s volume growth has not kept pace with the country’s GDP growth over the past 15 years.

From 2007 to 2023, while India’s GDP grew at an average rate of 5.9%, FMCG volume growth was only 3.4%. A more significant slowdown was observed between 2017 and 2023, where FMCG volume growth declined from 3.5% to 2.9%, impacted by various disruptive events like the implementation of GST, demonetisation, and the COVID-19 pandemic.

The report also highlighted consumer spending patterns, revealing that the affluent 16% of the population accounts for 32% of total consumption, with the middle-income households contributing the rest. Another factor affecting FMCG volume growth is the sharp rise in consumer staple prices since 2012, which has led to a reduction in FMCG product consumption relative to other items.

Also Read | 3 of 4 households in India have ITC products, analysts expect FMCG focus to drive growth

Abheek Singhi, MD & Senior Partner at Boston Consulting Group, remains optimistic about the sector’s future. He predicts an upturn in FMCG volume growth in the next 12 months, driven by supply-side actions and industry efforts. This expected improvement comes as a welcome sign for the industry, which is looking to rebound from a period of slower growth.

Also Read | The fifth ‘P’ in FMCG: How politics shapes what we consume

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Share of agriculture in India’s GDP declined to 15% in FY23, says government

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The share of agriculture in India’s GDP declined to 15% last fiscal year from 35% in 1990-91 due to rapid growth in the industrial and service sector, the government informed on Tuesday.

“The share of agriculture in total Gross Value Added (GVA) of the economy has declined from 35% in 1990-91 to 15% in 2022-23. The decline is brought out not by the decline in agricultural GVA but a rapid expansion in industrial and service sector GVA,” Union Agriculture Minister Arjun Munda said in a written reply to Lok Sabha.

Also Read: Need to focus on climate and come up with green agriculture initiatives: NABARD chairman

“In growth terms, the agriculture and allied sectors have registered an average annual growth of 4% during the last five years. As far as global experience is concerned, the share of agriculture in the world’s GDP has also declined over the decades and stands at about 4% in recent years,” he added.

The minister said the government has adopted/implemented several developmental programmes, schemes, reforms, and policies towards increasing agricultural productivity, enhancing resource use efficiency, promoting sustainable agriculture, strengthening infrastructure, and ensuring remunerative prices to farmers.

He highlighted that the PM-KISAN scheme was launched in 2019. It is an income support scheme providing Rs 6,000 per year in three equal installments. “More than Rs 2.81 lakh crore has been released so far to more than 11 crore farmers as of November 30, 2023,” Munda said.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s GDP growth is reflection of transformative reforms of last 10 years: PM Modi

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Prime Minister Narendra Modi on Saturday said India’s GDP growth of 7.7 per cent in the first six months of the current fiscal year is a reflection of the country’s strengthening economy and the transformative reforms carried out in the last 10 years.

Addressing the ‘Infinity Forum 2.0’ conference at the GIFT City in Gandhinagar via video link, Modi said his government wants to turn the Gujarat International Finance Tec (GIFT) City into a global nerve centre of the new age global financial and technology services.

“In the first six months of this financial year, India has achieved a GDP growth of 7.7 per cent…Today, the entire world has pinned its hopes on India, and this did not happen just on its own. This is a reflection of India’s strengthening economy and also the transformative reforms carried out in the last 10 years,” Modi said in his inaugural address.

India is one of the fastest growing fintech markets in the world today and the GIFT International Financial Services Centre (IFSC) is emerging as its centre, the PM said. He urged experts to share their ideas on developing a market mechanism for green credits.

On the occasion, PM Modi congratulated the people of Gujarat on the inclusion of the state’s traditional Garba dance in UNESCO’s ‘Representative List of the Intangible Cultural Heritage of Humanity’.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India set to become the third-largest economy by 2030: S&P Global Ratings

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India will become the world’s third-largest economy by 2030 and the fastest growing major economy in the next three years, according to a report released by credit rating agency S&P Global Ratings on Tuesday (December 4).

The credit rating agency predicts that India’s GDP growth will reach 7% in the financial year 2026-27, from 6.4% projected expansion in FY24.

The Indian economy grew 7.2% in 2022-23 fiscal ended March 2023. The country’s GDP expanded 7.8% and 7.6% in the June and September quarters, respectively.

According to S&P Global Ratings, a major test for India would be to unlock the ‘immense opportunity’ and become the next big global manufacturing hub.

“Developing a strong logistics framework will be key in transforming India from a services-dominated economy into a manufacturing-dominant one,” the credit rating agency said in its report titled ‘Global Credit Outlook 2024: New Risks, New Playbook’.

The ratings agency also said that unlocking the labor market potential will largely depend upon upskilling workers and increasing female participation in the workforce. “Success in these two areas will enable India to realize its demographic dividend,” it said.

S&P Global Ratings further noted that a booming domestic digital market could also fuel expansion in India’s high-growth startup ecosystem during the next decade, especially in financial and consumer technology.

In the automotive sector, India is poised for growth, building on infrastructure, investment, and innovation, it said.

India’s GDP growth rate stood at 7.6% for the July-September. At 7.6%, the latest quarterly growth number is significantly higher than expectations.

Meanwhile, the Reserve Bank of India had forecast a growth rate of 6.5%.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India gets a slew of upgrades to its growth estimates

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s Gross Domestic Product (GDP) estimates were raised by analysts across the Street after the September quarter print surpassed consensus expectations.

For the September quarter, India’s GDP grew by 7.6% from last year, compared to a CNBC-TV18 poll of 7%. Chief Economic Advisor V Anantha Nageswaran said that there will be an upside to the 6.5% GDP forecast this year and that the growth momentum will continue in the December quarter as well.

The CEA also said that the high tax buoyancy shows that India may be understating its economic growth.

Goldman Sachs has increased India’s calendar year 2023 growth forecast by 20 basis points to 6.7% year-on-year but kept its 2024 forecast unchanged at 6.2%.

“We note potential downside risks to the 2024 growth outlook owing to the new regulatory measures by the RBI targeted at unsecured personal loans,” the note said.

#GDPGrowth | Indian economy posts better-than-estimated GDP growth of 7.6% for the quarter ending September 2023 (Q2FY24). And, this has led to a raise in estimates for FY24 & CY23 by most brokerages#Economy #IndiaGDP #IndianEconomy pic.twitter.com/a2Gct0Ukb7

— CNBC-TV18 (@CNBCTV18Live) December 1, 2023

India’s financial year 2024 GDP forecast has also been hiked by 50 basis points by brokerage firm Citi to 6.7%. “Overall, GDP data reaffirmed two trends — investment outpacing consumption and two-paced growth momentum,” the note said.

Citi is also expecting the Reserve Bank of India to maintain a status quo on interest rates and maintain the stance at “Withdrawal of Accommodation” at the December policy meeting.

State Bank of India has also raised India’s financial year 2024 GDP forecast to 7% from 6.7% earlier, while Axis Capital has raised estimates to 6.7% with upside risks.

Morgan Stanley has also raised the financial year 2024 growth forecast to 6.9% from 6.4% earlier, driven by robust domestic demand. For the financial year 2025, the brokerage has maintained its estimates at 6.5%.

However, HSBC expects growth could soften from these levels due to weaker FDI inflows, a likely softness in credit growth and normalising base effects over the next few months.

In his address at the third edition of India Debt Capital Market Summit 2023, Union Minister Piyush Goyal spoke about how India was earlier categorised as a fragile 5 economy, and how the Narendra Modi government worked towards changing this.

#WATCH | Union Minister Piyush Goyal addressed the 3rd edition of India Debt Capital Market Summit 2023

He says, ” All are aware that India was categorized as a fragile 5 economy. If you remember the headlines of that period, say, 3 or 4 years before 2014. Almost every month, we… pic.twitter.com/7YBv6Xpct5

— ANI (@ANI) December 1, 2023

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Expect upside to FY24 GDP growth forecast, tax buoyancy shows India may be understating growth: CEA

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Chief Economic Advisor V Anantha Nageswaran said he expects an upside to the 6.5% GDP growth forecast for this fiscal and expects growth momentum to continue in the third quarter as well.

India’s GDP growth for the second quarter came in at 7.6%, which was above both, the RBI’s forecast of 6.5% and a CNBC-TV18 poll of 7.03%. In the first quarter, India’s GDP growth was at 7.8%, and 6.2% in the year-ago period.

The CEA also added that high tax buoyancy showed India may be understating its economic growth. “When you have a tax buoyancy which is as high as 1.9 or close to 2, which is historically unprecedented, then it is quite possible that we are not measuring the underlying momentum of the economy. We will keep the GDP growth estimate for the full fiscal at 6.5%, but we are more comfortable (with the projection) than before,” he said.

The nominal GDP for the September quarter came in at 9.1%, above expectations of 8%. For the same time last year it was at 17.2% and at 8% in the previous quarter.

Nageswaran added that the impact of the second quarter’s numbers on the entire fiscal is yet to be worked out. “The momentum of economic growth will continue in the third quarter as well,” he said.

On another note, analysts across the Street too raised their GDP estimates after the September quarter print surpassed expectations.

In his address at the third edition of India Debt Capital Market Summit 2023, Union Minister Piyush Goyal spoke about how India was earlier categorised as a fragile 5 economy, and how the Narendra Modi government worked towards changing this.

#WATCH | Union Minister Piyush Goyal addressed the 3rd edition of India Debt Capital Market Summit 2023

He says, ” All are aware that India was categorized as a fragile 5 economy. If you remember the headlines of that period, say, 3 or 4 years before 2014. Almost every month, we… pic.twitter.com/7YBv6Xpct5

— ANI (@ANI) December 1, 2023

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India Q2 GDP data highlights: GDP growth displays resilience, strength of Indian economy amid testing times globally, says PM

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India Q2 GDP data highlights: India’s economy grew 7.6% in the September quarter as against 6.2% in the year-ago period, according to official data released on Thursday. India remains the fastest-growing major economy, as China’s GDP growth in the July-September quarter this year was 4.9%. As per the National Statistical Office (NSO) data, the GVA (Gross Value Added) of the agriculture sector recorded a 1.2% growth, down from 2.5% in the July-September quarter of 2022-23.

The GVA growth of the manufacturing sector accelerated to 13.9% in the second quarter of the current fiscal against a decline of 3.8% a year ago. The growth in Gross Domestic Product (GDP) during the April-September period in 2023-24 stood at 7.7% compared to 9.5% in the first half of the last financial year. The GDP growth in the first quarter of the current fiscal remained unchanged at 7.8%.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

S&P Global Ratings raises India’s FY24 GDP growth projection but lowers it for FY25

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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S&P Global Ratings has revised India’s Gross Domestic Product (GDP) growth projection for financial year 2024 (April 2023 – March 2024) to 6.4% from 6% earlier. It has cited robust domestic momentum to have offsetted headwinds from high food inflation and weak exports.

However, it has lowered the country’s GDP growth projection for financial year 2025 (April 2024 – March 2025) to 6.4% from 6.9% earlier, as it expects growth to slow in the second half amid subdued global growth, a higher base and a lagged impact of interest rate hikes from the Reserve Bank of India.

The ratings agency is also of the opinion that it will take some time for India’s interest rate cycle to turn as the headline inflation still remains above the RBI’s target of 4%. “In India, there was a transitory spike in food inflation in the July-September quarter, but it appears to have had little effect on the underlying inflation dynamics,” the note said.

Last week, Morgan Stanley had written in its note that India might become the first economy among Asian countries to cut interest rates by June next year.

For India, S&P Global expects interest rates to fall by 100 basis points by March 2024.

For the US, the ratings agency expects a gradual decline in inflation towards the US Federal Reserve’s target of 2%. However, it expects another rate hike in the December meeting and the first cut to take place only in mid-2024.

“In all, the strain from higher US interest rates on Asia-Pacific markets and currencies will likely persist into 2024,” the note said. A more resilient US economy would call for rates to be even higher for longer.

S&P Global also expects China to grow in-line with its potential in 2024. “After finding a trough in July, growth momentum has improved since August,” the note said.

The agency further said that measures taken on the fiscal and monetary easing have started to add up, particularly in real estate. For the world’s second-largest economy, S&P Global has raised its 2023 forecast to 5.4%. “Still, with the property sector struggling and confidence subdued, the growth outlook remains moderate,” it said.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

JPMorgan’s bold forecast: India to become 3rd largest economy by 2027, reach $7 trillion by 2030

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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JPMorgan’s Managing Director of Asia Pacific Equity Research, James Sullivan, sees India becoming the world’s third-largest economy by 2027, with its GDP more than doubling to $7 trillion by 2030.

“I would argue very strong long-term tactical drivers that make India a key overweight from a structural perspective from JPMorgan,” Sullivan said in an interview with CNBC-TV18.

Sullivan expects the manufacturing contribution to India’s GDP to rise to nearly 25% from 17% and exports to more than double, to over a trillion dollars.

“From a longer-term perspective, we see massive changes in the overall structure of the Indian economy, which present clear opportunities for sector selection within what we think will be a strong overall market,” he said.

Sullivan is also bullish on China with an “overweight” rating.

He pointed to the below-average earnings revision in China, a trend not seen since 2005, suggesting that China may be at an inflexion point in its economic trajectory. Such an inflexion point can often lead to new opportunities and challenges, making it a topic of keen interest for investors, he said.

“In China, we are very focused on specific sectors, if we can focus in line with government policy, if we can focus on deeply beaten down sectors that offer significant valuation support, then we see opportunity. So, it’s a slightly different portfolio allocation strategy in each market,” he said.

Why market experts have their eyes on China

There are indications that China is contemplating a boost in its 2023 budget deficit through a new stimulus initiative. This strategy involves the issuance of at least a trillion yuan, equivalent to $137 billion, in additional government debt, with the aim of channelling these funds into infrastructure projects.

Reports also suggest that China is exploring setting up a stock stabilisation fund to bolster investor confidence within the stock market. This prospective plan may entail investments in domestic stocks through established financial institutions and professionally managed funds, as detailed by the Financial Times. The government’s investments could potentially be complemented by other collaborating funds and institutions, according to the report.

For more details, watch the accompanying video

Also, catch all the live updates on markets with CNBC-TV18.com’s blog

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Ten reasons why the RBI believes the Indian economy will grow faster than World Bank estimates

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Reserve Bank of India has retained its estimate for India’s economic growth at 6.5% in gross domestic product (GDP). This is more than what many other agencies do. Both the World Bank and Goldman Sachs estimate India’s GDP to grow 6.3% in the financial year ending March 2024. 

The incoming threat to these estimates includes a sudden spike in oil prices, volatility in global financial markets, and a bigger-than-expected recession in the US, which may trigger a slowdown in other economies. Any escalation in the Russia-Ukraine war, or in any other geopolitical conflict e.g. US and China, may worsen the prospects. 

However, Shaktikanta Das reiterated his confidence in the resilience of the Indian economy and cited at least 10 reasons for the same. Let’s take a look:

1. Despite an uneven monsoon, the acreage under kharif crops was 0.2% above last year’s level, as of September 29. Rainfall over the monsoon core zone, consisting of most of the rainfed agriculture regions was normal, at 101% of the long-term average. 
2. Manufacturing improved in July and August 2023 in key sectors such as pharmaceuticals, basic metals, cement, motor vehicles, as well as food and beverages. The index of industrial production (IIP) rose by 5.7 per cent in July and core industries output expanded by 12.1 per cent in August.
3. The purchasing managers’ index (PMI), which is a survey that measures the business activity and sentiment, for manufacturing remained robust in September.
   

   Indicator	Growth in September 2023 (YoY)
   E-way bills	9.5%
   Toll collection	15.4%
   Railway freight traffic	6.7%

4. There’s a healthy expansion in the services sector and construction activity continues to be strong. Cement production grew 18.9% in August 2023 and steel consumption increased 21.5%, compared to the same time last year.
5. The private sector is investing more. Production of capital goods increased 4.6% in July 2023, while imports of similar products rose 13.3% in August 2023. Capital goods include machinery, equipment, vehicles, and tools, which are used for producing other products. 
6. Idle capacity at factories is coming down, and more of it is being put to work.
   

   Period	Capacity utilisation
   Dec 2022	74.1%
   March 2023	75.4%

   The average capacity utilisation between 2008-09 till now, excluding the peak pandemic period i.e. April to June 2021, has been 73.7%, according to the RBI. Data as of March 2023 has been better than the long-term average.

7. “Banks have sanctioned new projects in roads, bridges, inland waterways, railways, electricity, ports, airports, chemical and fertilisers,” the governor’s statement said. The total flow of resources from banks and other sources, to the commercial sector this year, at about ₹10.6 lakh crore so far, has been better than last year, according to the RBI.
8. The fall in exports has slowed down in August, to 1.7% from more than 10% in the preceding two months. Services exports have grown 5% to over $133 billion between April and August this year, compared to the same time last year. The fall in non-oil, non-gold imports, has also slowed down.
9. There’s a steady growth in urban consumption while rural demand is showing signs of revival, the RBI said, despite rising inflation.
   

   Metrics that RBI is relying on	Latest monthly growth
   Air passenger traffic	22.8% (August 2023)
   Car sales	27.7% (August 2023)

10. These improvements in different sectors, along with easing inflation, bode well for the economy as a whole. However, Governor Das warned that the international risks may lead to a spike in inflation. These risks like oil prices and volatility in financial markets will keep the Indian central bank on its toes.

Follow all the live updates from the RBI Governor’s Press Conference here.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow