Tag: World Bank

India to lead South Asia’s growth story, predicts World Bank report

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

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The World Bank has backed India’s growth story and stated that the country will lead the economic resurgence of South Asia.

The institution, in its report titled ‘Global Economic Prospects‘ also predicted the global economic growth to remain robust at 3.1% in 2018 followed by slowing down in the next two years.

The report said, “Growth in the region is projected to strengthen to 6.9% in 2018 and to 7.1% in 2019, mainly as factors holding back growth in India fade. Growth in India is projected to advance 7.3% in fiscal year 2018/19 and 7.5% in FY 2019/20, reflecting robust private consumption and strengthening investment.”

According to the World Bank, Pakistan is anticipated to expand by 5% in the current fiscal, reflecting tighter policies to improve macroeconomic stability and Bangladesh is expected to accelerate to 6.7% in FY 2018/19.

While the report was optimistic about the growth prospects of the region, particularly India, it also expressed concerns regarding the rising inflation.

It also highlighted the vulnerability the region may suffer in case of rise in crude oil prices or acceleration of protectionist policies across the world.

Another key finding in the report was the advancement witnessed in the region, when it comes to per capita growth rates, “Per capita growth rates in the region are advancing at rates expected to help bring down poverty in coming years, especially in India.”

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

World Bank bullish on commodity prices in 2018

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

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Commodity markets in 2018 started on a higher note, as the first quarter ended on a higher note for sectors including energy, metals and agriculture.

The latest reports from banks, brokerages and the World Bank expect the rally in commodity markets to continue into 2019.

Commodity markets have seen strength on the back of a broad based global rally, with the World GDP increasing year-on-year.

Policy actions under discussion, additional tariffs, sanctions, environment controls, underinvestments and geopolitical factors have all led to commodities surging.

Crude Oil

World bank forecasts Oil prices to average $65 in 2018, and into 2019. Energy prices gained 10% in the first quarter on the back of OPEC production cuts, geopolticial tensions and strong demand.

The World Bank also pointed out the need for a stronger monetary and fiscal policy frameworks in for oil exporters.  

Downside risks include weaker compliance with the oil producers’ agreement to restrain output, or outright termination of the accord.

Rising output from Libya and Nigeria, and a quicker-than-expected rise in shale oil output, are also seen as contributing factors to a supply glut.

Metals

Metal prices are expected to rise 9% in 2018 on back of robust global demand, and no major new capacity added in the space.

The World bank is most bullish on Nickel, with expected gains of about 30% for 2018 due to demand estimates from electrical vehicle makers, and risks of sanction on Russia. Iron ore prices are expected to fall 11% due to strong production in China. 

 Coal prices

Coal prices are expected to average $85/mt in 2018, down slightly from 2017, as inventories are replenished and consumption is curtailed in a move towards cleaner burning fuels. Coal prices gained 4% in the first quarter, after surging about 34% in 2017.

 Precious Metals

Gold prices are expected to gain 3%, platinum 4%, but silver prices are expected to ease on moderating industrial demand.

Precious metal face downside risk from rising equities, a strong dollar and easing geopolitical tensions, among other factors. 

 Beverages

Global coffee output has increased and global consumption is estimated at 161 million bags, leaving a 7 million bag increase in stocks.

Arabica prices are expected to fall 2% from last year, while Robusta prices are set to fall 10 percent in 2018.

Cocoa prices are expected to rise more than 8% in 2018, while tea prices are likely to rise modestly.

Agricultural Prices

In this sector also a key policy risk is introduction of duties, apart from the sowing numbers and weather. 

The prices are forecast to gain 2.2% in 2018, and a further 1.3% in 2019. Grains are expected to gain 8% while oil seeds prices are expected to go up by 4%.

Manisha Gupta is Editor – Commodities & Currencies

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

India retains position as the top remittance receiver, says World Bank

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

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India has retained its position as the top remittances receiving country with its diaspora sending about $ 69 billion back home in 2017, the World Bank said today.

Remittances to India picked up sharply by 9.9 percent to $ 69 billion in 2017, reversing the previous year’s dip, but were still short of $ 70.4 billion received in 2014.

Payments from immigrants back to their home countries rebounded to reach a new record in 2017 but the costs of transferring funds also increased, the World Bank said in a report.

The stronger-than-expected recovery in remittances — payments that are key to supporting the economies of many poor countries – was driven by growth in Europe, Russia, and the United States, it said.

The rebound in remittances, when valued in US dollars, was helped by higher oil prices and a strengthening of the euro and ruble.

World Bank said remittance inflows improved in all regions and the top remittance recipients were India with $ 69 billion, followed by China ($ 64 billion), the Philippines ($ 33 billion), Mexico ($ 31 billion), Nigeria ($ 22 billion), and Egypt ($ 20 billion).

India had in 2015 received remittance of $ 68.91 billion, which fell to $ 62.74 billion in the following year and has now risen to $ 68.96 billion in 2017.

The Bank estimated that officially recorded remittances to low- and middle-income countries reached $ 466 billion in 2017, an increase of 8.5 percent over $ 429 billion in 2016. Global remittances, which include flows to high-income countries, grew 7 percent to $ 613 billion in 2017, from $ 573 billion in 2016.

“Remittances are expected to continue to increase in 2018, by 4.1 percent to reach $ 485 billion. Global remittances are expected to grow 4.6 percent to $ 642 billion in 2018,” it said.

The global average cost of sending $ 200 was 7.1 percent in the first quarter of 2018, more than twice as high as the Sustainable Development Goal target of 3 percent. Sub-Saharan Africa remains the most expensive place to send money to, where the average cost is 9.4 percent.

Major barriers to reducing remittance costs are de-risking by banks and exclusive partnerships between national post office systems and money transfer operators. These factors constrain the introduction of more efficient technologies such as internet and smartphone apps and the use of crypto currency and blockchain in remittance services, the World Bank said.

“While remittances are growing, countries, institutions, and development agencies must continue to chip away at high costs of remitting so that families receive more of the money,” said Dilip Ratha, lead author of the report.

The World Bank asked countries to take steps to simplify the process to reduce the costs, including “introducing more efficient technology.”

By region, Europe and Central Asia saw the biggest growth last year, jumping 21 per cent, while Sub-Saharan Africa rose 11 percent.

East Asia and the Pacific saw the biggest inflows of $ 130 billion, as South Asia received $ 117 billion, followed by Latin America with $ 80 billion.

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

19 crore Indian adults don’t have bank account, says World Bank

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

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India has 19 crore adults without a bank account despite the success of the ambitious Jan Dhan Yojana, making it the world’s second largest unbanked population after that of China, the World Bank said in a report on Thursday.

Besides, almost half of the bank accounts remained inactive in the past year, the multilateral financial institution said in a report, even as it lauded the Indian government’s financial inclusion scheme, the Jan Dhan Yojana, for bringing in additional 31 crore Indians into the formal banking system by March 2018.

It also said the country’s adult population with a bank account has more than doubled to 80% since 2011. The Jan Dhan Yojana was launched by the Modi government in 2014.

According to the latest Global Findex Database released by the World Bank on the sidelines of the annual Spring meeting of the International Monetary Fund and the World Bank, 11% of the world’s unbanked adults are in India.

Globally, 69% of adults, i.e, over 3.8 billion people, now have an account at a bank or mobile money provider, a crucial step in escaping poverty.

This is up from 62% in 2014 and the 51% in 2011. From 2014 to 2017, 515 million adults have obtained an account, and 1.2 billion have done so since 2011, according to the Global Findex database.

The Bank said that China and India, despite having relatively high account ownership, claim large shares of the global unbanked population because of their sheer size.

Home to 225 million adults without an account, China has the world’s largest unbanked population, followed by India (190 million or 19 crore), Pakistan (100 million), and Indonesia (95 million).

The Modi government’s massive push in 2014 to increase account ownership through biometric identification cards has benefited traditionally excluded groups, the World Bank said. It, however, expressed concern that almost half of the account owners have an account that remained inactive in the past year.

Part of the explanation might be India’s Jan-Dhan Yojana scheme, developed by the government to increase account ownership. The scheme brought an additional 310 million Indians into the formal banking system by March 2018, many of whom might not yet have had an opportunity to use their new account, it said.

In India, the share of adults with an account has more than doubled since 2011, to 80%, the World Bank said, adding that an important factor driving this increase was a government policy launched in 2014 to boost account ownership among unbanked adults through biometric identification cards.

“This policy benefited traditionally excluded groups and helped ensure inclusive growth in account ownership, the report said.

Between 2014 and 2017, account ownership in India rose by more than 30 percentage points among women as well as among adults in the poorest 40% of households.

Among men and among adults, in the wealthiest 60% of households,  it increased by about 20 percentage points.

The World Bank said a strong government push to increase account ownership through the Aadhaar move has helped narrow both the gender gap and the gap between richer and poorer adults. In India three years ago, men were 20% more likely than women to have an account.

“Today, India’s gender gap has shrunk to 6 percentage points thanks to a strong government push to increase account ownership through biometric identification cards,” the report said.

Observing that for governments, switching from cash to digital payments can reduce corruption and improve efficiency, the World Bank said in India the leakage of funds for pension payments dropped by 47%  (2.8 percentage points) when the payments were made through biometric smart cards rather than being handed out in cash.

According to the report, the gender gap in the use of digital payments varies substantially among developing economies.

In India, for example, 42% of male account owners use digital payments, while just 29% of female account owners do, it said.

“In the past few years, we have seen great strides around the world in connecting people to formal financial services,” World Bank Group President Jim Yong Kim said.

“Financial inclusion allows people to save for family needs, borrow to support a business, or build a cushion against an emergency.

“Having access to financial services is a critical step towards reducing both poverty and inequality, and new data on mobile phone ownership and internet access show unprecedented opportunities to use technology to achieve universal financial inclusion,” he added.

Globally, 1.7 billion adults remain unbanked, yet two-thirds of them own a mobile phone that could help them access financial services.

Digital technology could take advantage of existing cash transactions to bring people into the financial system, the report finds.

In South Asia, the share of adults with an account rose by 23 percentage points, to 70%.

Progress was driven by India, where a government policy to increase financial inclusion through biometric identification pushed the share with an account up to 80%, with big gains among women and poorer adults.

Excluding India, regional account ownership still rose by 12 percentage points but men often benefited more than women.

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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 must create 8.1 million jobs yearly to recoup, says World Bank

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

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India needs to create more than eight million jobs a year to maintain its employment rate which has been declining over the past decade, according to the latest World Bank report.

In its biannual South Asia Economic Focus (SAEF) report released in Washington on Sunday, the multilateral lender also projected India’s growth rate to rise to 7.3% in the ongoing fiscal.

“Every month, the working age increases by 1.3 million people and India must create 8.1 million jobs a year to maintain its employment rate, which has been declining based on employment data analysed from 2005 to 2015, largely due to women leaving the job market,” the report said.

“(India’s) growth is expected to accelerate from 6.7 per cent in 2017 to 7.3% in 2018 and to subsequently stabilise supported by a sustained recovery in private investment and private consumption,” it said.

The report projected the country’s growth to further accelerate to 7.5% in 2019-20 and 2020-21, while suggesting that India should seek to accelerate investments and exports to take advantage of the recovery in global growth.

In this edition of the SAEF titled “Jobless Growth?”, the World Bank also said South Asia has regained its lead as the fastest growing region in the world supported by recovery in India.

“Much of the progress, however, is driven by India’s growth rebound and is not consistent across countries. Despite accelerating global growth and trade, exports remain weak. Progress on fiscal consolidation is slow, and deficits are high,” a World Bank release said.

The report contends that growth alone will not be enough to attain the higher employment rates enjoyed by other developing countries, especially among women.

“More than 1.8 million young people will reach working age every month in South Asia through 2025 and the good news is that economic growth is creating jobs in the region,” World Bank South Asia Region Chief Economist Martin Rama said in a statement.

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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

World Bank shows green signals for India’s growth numbers in the near future

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

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The Indian economy is set to bounce back to its 7.5% growth rate trend in the near future as it seems to have bottomed out from the impact of its two major reforms in the past – Goods and Services Tax (GST) and demonetisation.

After seeing a continuous fall in the last three quarters due to these reforms, the India Development Update, a report by World Bank released every six months, points economic activity has begun to stabilize since August 2017.

The services will continue to remain the main driver of economic growth where industrial activity is poised to grow and manufacturing is expected to accelerate. Agriculture is also likely to grow at its long-term average growth rate, the report stated.

“Durable revival in private investments and exports would be crucial for India achieving a sustained high growth of 8% and above,” said Poonam Gupta, Lead Economist and the main author of the report.

“This will require continued impetus for structural reforms. Resorting to countercyclical policies will not help spur sustained growth and India should not compromise its hard-earned fiscal discipline in order to accelerate growth,” she added.

The reports have pointed a slow yet upward trend across all the sectors in the last 50 years, showing the economy to be stable. The upward trend has shown an increase in labour productivity and total factor productivity.

The report points to the positive impulse expected from India’s new tax regime and shows a thumbs up saying that it will likely improve the domestic flow of goods and services, help in formalising labour in the economy and in turn will enhance growth.

The report assesses that for India to sustain its growth path, the country will need to watch out for the changing landscape of open trade, reforms in the banking sector, strengthening financial institutions, among others.

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