IMF Upgrades India GDP Growth Forecast To 6.7% For FY24

WASHINGTON, Jan 30: The IMF now projects India's GDP growth at 6.7% for FY24, it said in its World Economic Outlook published on Tuesday. It is an upward revision of 40 percentage points from its projection in October 2023.

The IMF also revised its forecast for FY25 and FY26 by 20 percentage points. It now projects GDP to grow by 6.5% in both fiscals. Growth in India is projected to remain strong in FY25 and FY26, reflecting resilience in domestic demand, it said.

Global growth is projected at 3.1% in 2024 and 3.2% in 2025, with the 2024 forecast 0.2 percentage points higher than that in the October 2023 outlook, on account of greater than expected resilience in the United States and several large emerging market and developing economies, as well as fiscal support in China, it said.

The forecast for 2024-25 is, however, below the historical (2000–2019) average of 3.8%, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, and low underlying productivity growth.

Microsoft hits $3 trillion value, cementing strength of AI rally

NEW YORK, Jan 24: Microsoft Corp. achieved a historic $3 trillion market valuation on Wednesday, in the latest example of how optimism over artificial intelligence has fueled a seemingly unstoppable advance in the software giant.

The stock rose as much as 1.3% to $403.95, resulting in a market capitalization of $3 trillion. The threshold cements Microsoft’s status as one of the largest public stocks. It briefly surpassed Apple Inc. in value — which last year became the first company to hit $3 trillion — but subsequently dropped back below the iPhone maker, with the two trading places ever since.

The Redmond, Washington-based company is one of the so-called Magnificent 7 that fueled the market’s advance over 2023, gaining about 57%. The advance continued into this year, with a 7.4% rise that exceeds the 4.6% gain of the Nasdaq 100 Index. Microsoft accounts for 7.3% of the S&P 500 Index.

Much of the gain reflects investor enthusiasm over AI and its potential to accelerate growth in both earnings and revenue. Microsoft, through its partnership with OpenAI Inc., is seen as one of the biggest beneficiaries of AI. It has released AI-supported services to customers.

Apple's share dip may erase $90 billion from market cap

SAN FRANSCISCO, Jan 2: iPhone maker Apple's shares dropped by 3 per cent, hitting a seven-week low following Barclays downgrade of the shares of the world's most valuable firm amid concerns that the demand for its devices will remain weak this year.

On Nasdaq, the shares of Apple were trading at $187.24, down by 2.75 per cent after opening the day at $187.15. Barclays is the second brokerage to have the equivalent of a ‘sell’ rating on Apple's stock, it was reported.

Since early last year, the Cupertino-based technology giant has been grappling with a demand slowdown, with its performance in China being worrisome following the revival of local competitor Huawei.

"The iPhone 15 has been lacklustre and we believe iPhone 16 should be the same," Barclays analyst Tim Long said. Barclays has also warned of risks for Apple's services business, currently under scanner in countries including the US.

According to a data by global financial markets infrastructure and data provider LSEG, Long is rated four out of five stars for his recommendation accuracy on Apple stock.

As of now, Apple's market cap stands at $2.91 trillion. The shares drop is likely to erase about $90 billion from the company's market cap. The stock accounting for 7 per cent of S&P 500's weight had surged nearly 50 per cent last year and hit a record-high in December.

GST collections rise 10% YoY in December to Rs 1.65 lakh crore

NEW DELHI, Jan 1: The government's Goods and Services Tax (GST) collections climbed 10 percent year-on-year in the last month of 2023 to Rs 1.65 lakh crore, the Ministry of Finance said on January 1.

At Rs 1.65 lakh crore, the December GST collections is 2 percent lower than the Rs 1.68 lakh crore collected in November. This is the tenth month in a row that the monthly GST collection has come in above the Rs 1.5-lakh-crore mark.

The latest GST data takes the average monthly collection in 2023-24 to Rs 1.66 lakh crore.

Monthly GST collections have risen over the years. From averaging under Rs 1 lakh crore per month in 2017-18 - its first year - collections rose rapidly after the pandemic-hit 20202-21 to average Rs 1.51 lakh crore in 2022-23.

IMF Warns India on Debt Concerns, Says It May Exceed 100% of GDP

NEW DELHI, Dec 22: The International Monetary Fund (IMF) has warned that India’s general government debt may exceed 100% of gross domestic product (GDP) in the medium term saying that long-term risks are high because the country needs considerable investment to improve resilience to climate stresses and natural disasters.

“This suggests that new and preferably concessional sources of financing are needed, as well as greater private sector investment and carbon pricing or equivalent mechanism,” the IMF said in its annual Article IV consultation report.

The IMF report is part of the Fund’s surveillance function under the Articles of Agreement with member countries.

The Indian government, however, disagreed, saying that sovereign debt risks are limited as it is mainly denominated in domestic currency.

K.V. Subramanian, India’s executive director at the IMF, said the IMF’s assertion that the baseline carries the risk that debt would exceed 100% of GDP in the medium term in the event of shocks which India has experienced historically sounds extreme.

“The same can be said of the staff prognosis that debt sustainability risks are high in the long term. The risks from sovereign debt are very limited as it is predominantly denominated in domestic currency. Despite the multitude of shocks, the global economy has faced in the past two decades, India’s public debt-to-GDP ratio at the general government level has barely increased from 81% in 2005-06 to 84% in 2021-22, and back to 81% in 2022-23,” he said in a statement, which is part of the report.

The IMF also reclassified India’s exchange rate regime to “stabilised arrangement,” but India disputes this, emphasising the importance of exchange rate flexibility.

In its Article IV report, the IMF gave a fairly optimistic outlook for India’s economy, saying it has the potential to grow faster than the fund’s forecast of 6.3% in the current and next fiscal years if the government undertakes key structural reforms, it was reported.

In an accompanying statement to its report, IMF said that India needs “ambitious” fiscal consolidation over the medium term in order to curb its public debt.

“A sharp global growth slowdown in the near term would affect India through trade and financial channels. Further global supply disruptions could cause recurrent commodity price volatility, increasing fiscal pressures for India. Domestically, weather shocks could reignite inflationary pressures and prompt further food export restrictions. On the upside, stronger than expected consumer demand and private investment would raise growth,” it said.

In Blow To Tesla, India Says Not Planning To Cut EV Import Tax

NEW DELHI, Dec 14: The government said it's not currently considering reducing taxes on imported electric vehicles, a stance that could delay Tesla Inc.'s plan to enter the market.

"Presently, there is no proposal either to provide an exemption from local value addition cost or to provide a subsidy on the import duty on electric vehicles in India," Som Parkash, junior minister of the Ministry of Commerce and Industry, told parliament late Wednesday.

Parkash said existing policies under the government's "Make-in-India" push are aimed at encouraging domestic and foreign investment in the EV industry. The government launched a $3.1 billion incentive program in 2021 to boost local EV production. In addition, it's offering incentives to companies that want to build batteries in India under a $2 billion program.

The government's statement is an unexpected turn considering it was working on a policy that would have allowed international companies to import electric cars on concessional tax rates if they commit to eventually manufacturing in India, Bloomberg News reported last month.

The talks between Tesla and India could once again end in a deadlock. Both sides were earlier stuck in a year-long impasse as Prime Minister Narendra Modi's administration pushed the US automaker to produce cars locally, while Tesla Chief Executive Officer Elon Musk sought lower taxes to first sell vehicles built elsewhere at competitive prices.

While they have resumed dialog since, and Musk even said Tesla would likely make a "significant investment" in the South Asian nation during PM Modi's US visit in June, those plans could now get delayed.

India and Tesla were closing in on an agreement that involved selling the US automaker's cars in the country from next year as well as setting up a factory in two years, Bloomberg reported last month.

The Trade Minister Piyush Goyal, who visited Tesla's plant in Fremont, California last month, has said that Tesla is planning to almost double purchases of auto parts from India to $1.9 billion this year.

GST collections rise to second-highest ever at Rs 1.72 lakh crore in October, up 13% YoY

NEW DELHI, Nov 1: The government's Goods and Services Tax (GST) collections climbed 13 percent year-on-year in October to Rs 1.72 lakh crore, second-highest revenue collection ever, the Ministry of Finance said on November 1.

"GST revenue collection for October 2023 is second highest ever, next only to April 2023. Revenue from domestic transactions (including import of services) is 13 percent higher year-on-year. Average gross monthly GST collection in FY 2023-24 now stands at Rs 1.66 lakh crore, which is 11 percent higher year-on-year," the finance ministry said in a statement.

At Rs 1.72 lakh crore, the October GST collections is 5.71 percent higher than what was collected in September.

This is the eighth month in a row that the monthly GST collection has come in above the Rs 1.5-lakh-crore mark.

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