Stress in microfinance sector doubles in April to September 2024: RBI
Asset quality stress in the microfinance sector doubled from April to September 2024, with loans overdue increasing from 2.15% to 4.30%. Borrower indebtedness also rose, impacting credit growth and prompting RBI to take supervisory actions against high interest rates. Banks are de-risking by limiting book growth.
India’s macro fundamentals strong, all key indicators in positive zone: RBI Financial Stability Report
The Reserve Bank of India’s December 2024 Financial Stability Report shows that the Indian financial system is resilient. Scheduled commercial banks exhibit strong profitability and declining non-performing assets. Non-banking financial companies have healthy capital buffers and good earnings. The insurance sector maintains a robust solvency ratio. Despite global risks, India’s macroeconomic fundamentals remain strong.
India’s manufacturing sector’s contribution to GVA will surge to 21% by 2032 from 14% now: Report
India’s manufacturing sector is set to rise significantly, with its contribution to Gross Value Added (GVA) projected to increase from 14% to 21% by 2032. This growth is driven by government and corporate capital expenditure, infrastructure investment, and the Production-Linked Incentive (PLI) scheme, creating substantial jobs and boosting the economy.
India’s BoP strengthened by robust inflows from NRI deposits, external commercial borrowing in last quarter: Report
India’s Balance of Payments improved significantly in Q2 FY25. Strong inflows from Foreign Portfolio Investments, External Commercial Borrowings, and Non-Resident Indian deposits drove this improvement. Despite an increase in Foreign Direct Investment outflows, capital account surpluses rose. Investor confidence and favorable global financial conditions supported these trends, helping to strengthen India’s external finances.
Rupee’s backloaded retreat against the dollar mars year of rare stability
The rupee has declined significantly against the US dollar, especially in the final quarter. This impacts inflation and adds complexity to economic decisions. Enhanced rate cuts by the US Federal Reserve, combined with global and regional economic challenges, highlight the necessity for a competitive currency policy. Policymakers must balance growth and price stability amid these challenges.
ET Graphics | Inflation drives surge in spending on vegetables and spices, HCES 2023-24 reveals
Vegetables and spices saw a steep increase in spending across both rural and urban areas during August 2023 to July 2024, compared to the previous year, driven largely by inflation. Overall, food expenditure grew at a faster rate than non-food items, according to the Household Consumption Expenditure Survey (HCES) 2023-24. ET takes a closer look at the data.
Tech to drive India’s manufacturers growth: Survey
Indian manufacturers are increasingly utilizing technologies such as IoT, AI, ML, robotics, and automation to boost profitability and global competitiveness. Despite this, many firms are dedicating less than 10% of their budgets to technology. The report anticipates a rise in tech investments to 11-15% within two years, driven by high-capital industries leading the way.
If FPIs outflows remain constant, India’s Balance of Payments will be neutral for FY25: Report
India’s current account deficit widened to USD 11.2bn in Q2, with Balance of Payments potentially heading into negative territory due to FPI outflows and a widening trade deficit. The external sector’s vulnerability could impact the Indian Rupee’s value amidst global economic pressures.
Indian economy to grow at 6.5-6.8 pc in FY25 on higher domestic consumption: Deloitte
Indian economy is predicted to grow at 6.5-6.8 per cent this fiscal, increasing to 6.7-7.3 per cent in FY2026, driven by domestic consumption. Deloitte highlights the government’s focus on infrastructure, digitisation, and FDI as growth boosters. Several global challenges may impact growth but India’s economic strategies could help in sustaining momentum.
Spree of nuptials unties some knots in demand
Weddings this year boost sales of gold, jewellery, apparel, and packaged staples, with notable increases during the November-December wedding season. This surge comes amidst overall sluggish retail market conditions due to high food inflation, providing much-needed economic relief.
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India’s CAD likely to exceed 2 pc of GDP in Q3 FY25 amid gold import surge: Report
India’s Current Account Deficit (CAD) is projected to exceed 2 per cent of GDP in Q3 FY25 due to rising gold imports. Despite this, resilient services exports and remittance inflows should keep the overall CAD within 1.2-1.5 per cent of GDP for FY25.
Urban-rural consumption gap closes further in 2023-24
Consumption inequality between rural and urban India decreased in 2023-24, with notable increases in Monthly Per Capita Consumption Expenditure (MPCE) in both areas. Non-food items continued to dominate expenditures. Government support contributed to rural growth, and social welfare programmes impacted overall consumption patterns.
Over 20 states’ consumption spend higher than national avg: Report
Sikkim had the highest monthly per capita consumption expenditure among Indian states for 2023-24 in both rural and urban areas. Chhattisgarh had the lowest. Over 20 states and union territories recorded higher expenditure than the national average. Meghalaya had the largest urban-rural gap. Kerala had the smallest gap among states, while Lakshadweep had the smallest among union territories.
Rural consumption rises higher than urban, allowing the inequality to dip during Aug 2023-July 2024
Consumption inequality decreased in both rural and urban areas during August 2023-July 2024 compared to the previous year, with Gini coefficients dropping in both regions. The survey showed a rise in average monthly per capita expenditure (MPCE). Non-food items constituted the largest share of household expenditures.
Current account deficit narrows to $11.2 billion in Q2FY25
India’s current account deficit was $11.2 billion or 1.2% of GDP in July-September, similar to the previous year. The merchandise trade deficit increased to $75.3 billion, while net services receipts rose to $44.5 billion. Private transfer receipts also grew, and the balance of payments showed a surplus of $18.6 billion.
India’s forex reserves fall to $644.39 billion, down $8.4 billion as of Dec 20
India’s foreign exchange reserves dipped by $8.4 billion to $644.39 billion as of December 20, according to data shared by the Reserve Bank of India (RBI) on Friday. For the previous week, India’s foreign exchange reserves dropped by $1.98 billion during the week ending December 13, 2024, settling at $652.87 billion.
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