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Tag: gdp growth

  • India’s GDP Growth Projected At 7 Per Cent In Q2 FY26: Report

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    New Delhi:

    India’s GDP expansion is expected to reach a robust 7 per cent in the second quarter of the current financial year (Q2 FY26) from 7.8 per cent in the April-June period (Q1 FY26), a report said on Monday.

    Further, the growth in the gross value added (GVA) is expected to record a narrower dip to 7.1 per cent from 7.6 per cent, respectively.

    “Lower expansion in the services sector– 7.4 per cent in Q2 FY26 from 9.3 per cent in the first quarter this fiscal, and agriculture– 3.5 per cent from 3.7 per cent, is likely to outweigh a pick-up in the performance of the industrial sector to a five-quarter high 7.8 per cent from 6.3 per cent,” ICRA said in its report.

    The report estimated net indirect taxes (in nominal terms) to contract on a year-on-year (YoY) basis in the quarter under review, after having risen by 9.5 per cent in Q1 FY26, aided by the decline in indirect taxes to -5.2 per cent from 11.3 per cent in Q1 FY2026, amid the shallower contraction in its subsidies to -4.6 per cent from -7.3 per cent.

    Accordingly, the gap between the GDP and the GVA growth is expected to revert to the negative territory at 10 bps in Q2 FY2026, after being positive (18 bps) in the previous quarter.

    “A lower YoY rise in Government spending is likely to weigh on the pace of the GDP and GVA growth in Q2 FY2026 compared to Q1 FY2026,” said Aditi Nayar, Chief Economist, Head-Research and Outreach, ICRA.

    “However, inventory stocking related to the early onset of the festive season, enhanced by the GST-rationalisation induced volume pickup, and upfronting of exports to the US ahead of the tariffs, are expected to boost the performance of the manufacturing sector, and help industry GVA growth outpace that of the services after a gap of four quarters,” she added.

    On an enlarged base, the growth rate of the gross capital expenditure moderated to 30.7 per cent in Q2 FY2026 (10.3 per cent in Q2 FY2025) from 52.0 per cent in Q1 FY2026 (-35.0 per cent in Q1 FY2025).

    Simultaneously, in absolute terms, the monthly average capex rose to Rs. 1,019 billion in Q2 from Rs. 917 billion in Q1, the report noted.

    On average, the monthly capex rose to Rs 544 billion in Q2 FY2026 from Rs 378 billion in Q1 FY2026, which is around half of the government’s level, the report noted.

    (Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)


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  • Biden Is Still the Democrats’ Best Bet for November

    Biden Is Still the Democrats’ Best Bet for November

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    Let’s start with the obvious. The concerns about Joe Biden are valid: He’s old. He talks slowly. He occasionally bumbles the basics in public appearances.

    Biden’s age is so concerning that many Biden supporters now believe he should step aside and let some other candidate become the Democratic Party’s presidential nominee. The New York Times journalist Ezra Klein made the best-available case for this view recently in a 4,000-word piece that garnered intense attention by arguing that Biden is no longer up to the task of campaign life. “He is not the campaigner he was, even five years ago,” Klein writes. “The way he moves, the energy in his voice. The Democrats denying decline are only fooling themselves.”

    In one sense Klein is correct. As the political strategist Mike Murphy said many moons ago, Biden’s age is like a gigantic pair of antlers he wears on his head, all day every day. Even when he does something exceptional—like visit a war zone in Ukraine, or whip inflation—the people applauding him are thinking, Can’t. Stop. Staring. At. The antlers.

    Biden can’t shed these antlers. He’s going to wear them from now until November 5. If anything, they’ll probably grow.

    That said, there’s another point worth noting up front: Joe Biden is almost certainly the strongest possible candidate Democrats can field against Donald Trump in 2024.

    Biden’s strengths as a candidate are considerable. He has presided over an extraordinarily productive first term in which he’s passed multiple pieces of popular legislation with bipartisan majorities.

    Unemployment is at its lowest low, GDP growth is robust, real wage gains have been led by the bottom quartile, and the American economy has achieved a post-COVID soft landing that makes us the envy of the world. He has no major scandals. His handling of American foreign policy has been stronger and defter than any recent president’s.

    Moreover, he is a known quantity. The recent Michigan primary results underscored that Democratic voters don’t actually have an appetite for leaving Biden. In 2012, 11 percent of Michigan Democrats voted “uncommitted” against Barack Obama when he had no opposition. This week, with two challengers on the ballot and progressive activists whipping votes against Biden, the “uncommitted” vote share was just 13 percent. Biden is fully vetted, his liabilities priced in. Voters are not being asked to take a chance on him.

    This last part is crucial, because 2024 pits a current president against a former president, making both quasi-incumbents. If Biden was replaced, another Democrat would have her or his own strengths—but would be an insurgent. Asking voters to roll the dice on a fresh face against a functionally incumbent President Trump is a bigger ask than you might think.

    But the biggest problem plaguing arguments for Biden’s retirement is: Who then? Pretend you are a Democrat and have been handed a magical monkey’s paw. You believe that Biden is too old to defeat Trump and so you make a wish: I want a younger, more vigorous Democrat. There’s a puff of smoke and Kamala Harris is the nominee.

    Do you feel better about the odds of defeating Trump in nine months?

    You shouldn’t. Harris’s approval rating is slightly lower than Biden’s. People skeptical of her political abilities point to her time as vice president, but that’s not really fair: Very few vice presidents look like plausible successors during their time in office. (George H. W. Bush and Al Gore are the exceptions.)

    What should worry you about Harris is her 2020 campaign, which was somehow both disorganized and insular. She did not exhibit the kind of management skills or political instincts that inspire confidence in her ability to win a national campaign. Worse, she only rarely exhibited top-level-candidate skills.

    Harris had some great moments in 2020. Her announcement speech and first debate performance were riveting. But more often she was flat-footed and awkward. She fell apart at the Michigan debate in 2019 and never got polling traction. (My colleague Sarah Longwell likens Harris to a professional golfer who’s got the yips.)

    Some public polling on this question fills out the picture: Emerson finds Harris losing to Trump by three percentage points (Biden is down one point in the same poll). Fox has Harris losing by five points (it also has Biden down by one point). These are just two polls and the questions were hypothetical, but at best, you can say that Harris is not obviously superior to Biden in terms of electability. At worst, she might give Democrats longer odds.

    So you go back to the monkey’s paw with another wish: a younger, more vigorous Democrat who’s not Kamala Harris, please.

    I’m not sure how it would work logistically—would the Democratic Party turn its back on the sitting vice president?—but this is magic, so just roll with it. There’s a puff of smoke and Gavin Newsom walks onstage.

    Newsom is one of those people who, like Bill Clinton, has been running for president since he was 5 years old. Also like Clinton, Newsom is a good talker with some ideas in his head. But Clinton was a third-way Democrat from the Deep South at a time when the Democratic Party needed southern blue-collar voters. Today, the Democratic Party needs Rust Belt blue-collar voters—and Newsom is a liberal from San Francisco. Not a great starting position.

    Every non-Harris Democrat begins from a place of lower name recognition, meaning that there would be a rush to define them in the minds of voters. Republicans have convinced 45 percent of the country that Scrantonian Joe Biden is a Communist. What do you think they’d do with Newsom? In the Fox poll, he runs even with Vice President Harris at -4 to Trump. In the more recent Emerson poll, Newsom trails Trump by 10 points.

    Then there’s the eyeball test. Look at Newsom’s slicked-back hair, his gleaming smile, and tell me: Does he look like the guy to eat into Trump’s margins among working-class whites in Pennsylvania and Michigan?

    What about Pennsylvania and Michigan? You have only one wish left on the monkey’s paw, and Gretchen Whitmer and Josh Shapiro—popular governors who won big in swing states in 2022—are sitting right there. Maybe you should put one of them on the ticket in place of Biden?

    There’s some polling to back you up: Whitmer would probably beat Trump in Michigan and Shapiro would probably beat Trump in Pennsylvania.

    Nationally, it’s a much different question. I haven’t found anyone who’s polled Shapiro-Trump nationally, but Emerson and Fox both have Whitmer polling worse than Biden. (Emerson has Whitmer 12 points behind Trump.)

    Name recognition accounts for part of this gap, but not all of it. In 2022, Whitmer won her gubernatorial race by 11 points while Shapiro won by 15. But each ran against an underfunded MAGA extremist. In the Michigan poll pitting Whitmer against Trump, she leads by only six points; in the Pennsylvania poll with Shapiro, he leads Trump by 11. So even in states where everyone knows them, these potential saviors are softer against Trump than they were against their 2022 MAGA tomato cans.

    Sure, Whitmer and Shapiro seem like strong candidates at the midsize-state level. But you never know whether a candidate will pop until they hit the national stage. Scott Walker, Ron DeSantis, John Kerry, Mitt Romney, Kamala Harris—all of these politicians looked formidable too. Then the presidential-election MRI for the soul exposed their liabilities. Always remember that Barack Obama’s ascent from promising senator to generational political talent was the exception, not the rule.

    Let’s say that one of these not–Kamala Harris candidates is chosen at the Democratic National Convention in August. In the span of 10 weeks they would have to:

    1. Define themselves to the national audience while simultaneously resisting Trump’s attempts to define them.

    2. Build a national campaign structure and get-out-the-vote operation.

    3. Unify the Democratic Party.

    4. Fend off any surprises uncovered during their public (and at-scale) vetting.

    5. Earn credit in the minds of voters for the Biden economy.

    6. Distance themselves from unpopular Biden policies.

    7. Portray themselves as a credible commander in chief.

    8. Lay out a coherent governing vision.

    9. Persuade roughly 51 percent of the country to support them.

    Perhaps it’s possible. But that strikes me as a particularly tall order, even if one of them is a generational political talent. Which—again with the odds—they probably aren’t.

    We’ve got one final problem with the monkey’s paw: It doesn’t exist. If Biden withdrew from the race, the Democratic Party would confront a messy, time-consuming process to replace him. Perhaps a rigorous but amicable write-in campaign would produce a strong nominee and a unified party. But perhaps the party would experience a demolition derby that results in a suboptimal nominee and hard feelings.

    Or maybe party elites at a brokered convention would choose a good nominee. (This is the Ezra Klein scenario, and I’m sympathetic to it. Smoke-filled back rooms get a bad rap; historically they produced better candidates than the modern primary system.) But very few living people have participated in a brokered convention. It could easily devolve into chaos and fracture the moderate, liberal, and progressive wings of the party.

    The point is: Biden has a 50–50 shot. Maybe a little bit worse, maybe a little bit better—like playing blackjack. Every other option is a crapshoot in which the best outcome you can reasonably hope for is 50–50 odds and the worst outcome pushes the odds to something like one in three.

    Joe Biden is Joe Biden. He isn’t going to win a 10-point, realigning victory. But his path to reelection is clear: Focus like a laser on suburban and working-class white voters in a handful of swing states. Remind them that Trump is a chaos agent who wrecked the economy. Show them how good the economy is now. Make a couple of jokes about the antlers. And then bring these people home—because many of them already voted for him once.

    Having a sure thing would certainly be nice, given the ongoing authoritarian threat we face. But there isn’t one. Joe Biden is the best deal democracy is going to get.

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    Jonathan V. Last

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  • World Bank upgrades India’s GDP growth forecast to 6.9% for FY23

    World Bank upgrades India’s GDP growth forecast to 6.9% for FY23

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    World Bank on Tuesday revised upwards its GDP growth forecast for India to 6.9 per cent for 2022-23 from 6.5 per cent earlier.

    World Bank’s India Development Update said India is affected by spillovers from the US, Euro area and China.

    It however saw the government meeting the fiscal deficit target of 6.4 per cent of the GDP in 2022-23.
    World Bank expects the inflation at 7.1 per cent in current fiscal year.

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  • India’s GDP growth to slow to 5.9% in 2023 on fading re-opening impact: Goldman Sachs

    India’s GDP growth to slow to 5.9% in 2023 on fading re-opening impact: Goldman Sachs

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    Goldman Sachs expects India’s economic growth to slow to 5.9% next year, from an estimated 6.9% growth in 2022, as the boost from the post-COVID reopening fades and monetary tightening weighs on domestic demand.

    “We expect growth to be a tale of two halves in 2023, with a slowdown in the first half (due to dwindling reopening effects),” Santanu Sengupta, India economist at Goldman Sachs, said in a note on Sunday.

    India’s growth in the seven months since March 2022, which Goldman Sachs considers the post-COVID reopening, was faster than most other emerging markets in the first seven months after they reopened, the U.S. investment bank said.

    “In the second half, we expect growth to re-accelerate as global growth recovers, the net export drag declines, and the investment cycle picks up,” Sengupta said.

    The Reserve Bank of India (RBI), last week, pegged the domestic growth rate at 7% for 2022-23.

    Sengupta expects the government to continue its focus on capital spending and sees signs of the nascent investment recovery continuing, with conducive conditions helping the economy pick up in the second half.

    Goldman Sachs expects headline inflation to drop to 6.1% in 2023, from 6.8% in 2022, saying government intervention was likely to cap food prices and that core goods inflation had probably peaked.

    “But upside risks to services inflation are likely to keep core inflation sticky around 6% year-on-year,” Sengupta added.

    Goldman expects the RBI to hike the repo rate by 50 basis points (bps) in December 2022 and by 35 bps in February, taking the repo rate to 6.75%. The forecast is more hawkish than the market consensus of 6.50%.

    On India’s external position, Sengupta reckons the worst is over, with the dollar likely near the peak. He expects the current account deficit to remain wide due to weak exports, but said growth capital may continue to chase India.

    Sengupta pegs the USD/INR INR=IN at 84, 83, and 82 over 3-, 6- and 12-month horizons, respectively, compared with 81.88 currently.

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  • India’s GDP growth next year to be better than IMF projections: CEA Nageswaran

    India’s GDP growth next year to be better than IMF projections: CEA Nageswaran

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    Chief Economic Adviser V Anantha Nageswaran on Monday said India is expected to clock better growth than IMF’s projections next year aided by enhanced capital formation. Recently, the International Monetary Fund (IMF) projected 6.8 per cent real growth for this year and 6.1 per cent for next year for India. 

    The growth rate for this year for India has been revised downward by 0.6 percentage points relative to the IMF’s June 2022 forecast following a weaker output in the second quarter and subdued external demand. The forecast for the next fiscal year remains unaltered at 6.1 per cent. 

    “I think in fact, the growth rates for the coming years may be slightly more, slightly better than what these numbers are, because I think there is a possibility that India’s capital formation cycle will do better after one decade of retrenchment,” he said. 

    India’s public digital infrastructure has probably crossed an inflection point and that will also be contributing to both formalisation of the economy and therefore higher growth, he said at a panel discussion organised by National Council of Applied Economic Research (NCAER) and the International Monetary Fund (IMF). 

    So, he said, maybe there could be 0.5-0.8 per cent addition to the 6 per cent baseline numbers. He also said that fiscal policy and monetary policy are usually synchronised and counterbalance each other. On high debt-to-GDP ratio, he said, sustainability is not a concern and it may reduce with asset monetisation. India can use asset monetisation proceeds to whittle down stock of debt and that will help improve the credit rating, he said. 

    “If we improve our credit rating and bring down the cost of capital, that will be the best stimulus we can provide to the economy via fiscal policy,” he said. Fiscal consolidation is needed in the Asia Pacific region to bring inflation down, he said. He also emphasised the need to address learning losses caused by the Covid pandemic. 

    Participating in the panel discussion, Rakesh Mohan, former RBI Deputy Governor, and president, Centre for Social and Economic Progress (CSEP), cautioned that India is on the right track in reducing debt levels but it should not be complacent about financial repression. Mohan emphasised the need for keeping inflation expectations anchored. 

    During his presentation, Krishna Srinivasan, director of the IMF’s Asia Pacific Department, said large medium-term output losses is averaging 9 per cent for the region from pandemic scarring. “While there is no panacea for productivity losses due to pandemic scarring, digital technologies can increase efficiency, deepen financial inclusion, and open new markets,” Srinivasan said.

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