Tag: growth

Categories
Business

IMF cuts India’s growth forecast to 8.2% for FY23

The fund had earlier projected 9.5 per cent growth for the Indian economy in 2022. It slashed it by 0.5 percentage points in its January report and it has further reduced it now by 0.8 point…reports Asian Lite News

The International Monetary Fund has further slashed India’s economic growth prospects for 2022 to 8.2 per cent from its earlier projection of 9 per cent, which in itself was lowered from 9.5 per cent. The global economy will suffer significantly from the war in Ukraine, the fund further projected in its World Economic Outlook released on Tuesday.

“Notable downgrades to the 2022 forecast include Japan (0.9 percentage point) and India (0.8 percentage point),” the IMF said in the World Economic Outlook released on Tuesday. The revision reflects, it added, “in part weaker domestic demand — as higher oil prices are expected to weigh on private consumption and investment — and a drag from lower net exports.”

The fund had earlier projected 9.5 per cent growth for the Indian economy in 2022. It slashed it by 0.5 percentage points in its January report and it has further reduced it now by 0.8 point.

The fund has also cut its projection for 2023 by 0.2 point to 6.9 per cent.

The World Bank projected 8 per cent growth for the Indian economy in 2022 in a report released last week, which also warned that the war in Ukraine will slow down South Asian countries’ recovery from economic devastation caused by the Covid-19. The impact on India, it added, would be “moderate”.

It said the Indian economy will grow at 8 per cent, which is slightly less than in 2021. Lingering impact of the investment programmes will keep the economy growing in the first half of 2022-23. “The negative impact of the war in Ukraine on FY2022/23 growth is expected to be moderate, so growth will begin to taper off in the second half of 2022,” the report said.

The bank attributed its India projection to constrained purchase by Indian households, incomplete recovery of the labour market in which unskilled workers were hit the hardest and inflation. On the negative side, business expectations and investment, which had improved, might sour amid elevated input prices and a faster-than-anticipated increase in borrowing costs, the bank said, adding that the travel services balance may improve as India allows international flights to resume, while exports of computer and professional services are expected to remain strong.

The fund said in its Tuesday report that the Ukraine war “has triggered a costly humanitarian crisis that demands a peaceful resolution,” the IMF report stated, adding, “Economic damage from the conflict will contribute to a significant slowdown in global growth in 2022.”

Global growth is projected to slow from an estimated 6.1 per cent in 2021 to 3.6 per cent in 2022 and 2023, the fund said. It is 0.8 and 0.2 percentage points lower for 2022 and 2023 than in the January World Economic Outlook Update. Beyond 2023, global growth is fore-cast to decline to about 3.3 per cent over the medium term.

“Crucially, this forecast assumes that the conflict remains confined to Ukraine, further sanctions on Russia exempt the energy sector (although the impact of European countries’ decisions to wean themselves off Russian energy and embargoes announced through March 31, 2022, are factored into the baseline), and the pandemic’s health and economic impacts abate over the course of 2022,” the report warned ominously.

ALSO READ-IMF lauds steps taken by Lanka to stabilise economy

Categories
Business Economy

World Bank projects India’s GDP growth at 8.3%

The development organisation said global gross domestic product will probably increase 4.1 per cent in 2022, lower than a 4.3 per cent forecast in June…reports Asian Lite News

The World Bank on Tuesday retained its FY22 growth forecast for India at 8.3 per cent but upgraded it to 8.7 per cent for FY23, from 7.5 per cent estimated earlier, citing improving growth prospects, especially a reviving private capex cycle.

“India’s economy is expected to grow by 8.3 per cent in the fiscal year ending March 2022, unchanged from the June 2021 outlook. The forecast for FY2022/23 and FY2023/24 for India has been upgraded to 8.7 per cent and 6.8 per cent, respectively, reflecting higher investment from the private sector and in infrastructure, and dividends from ongoing reforms,” it said in its latest Global Economic Prospects report.

The World Bank said the economic damage brought about by the second Covid wave in India has already been unwound, with output effectively returning to pre-pandemic levels. “Contact-intensive sectors, like trade and hotels, however, are still below pre-pandemic levels,” it said.

According to the government’s statistics department, the economy is expected to grow at 9.2 per cent in FY22, lower than the 9.5 per cent estimate by the International Monetary Fund as well as the Reserve Bank of India.

The World Bank said easing supply disruptions related to Covid-19 and deficient demand led to a return of inflation in India toward the central bank’s target in late-2021. “In most economies, monetary and fiscal policy are expected to remain broadly accommodative in 2022, but gradually shift to a focus on fiscal sustainability and anchoring inflation expectations,” it said.

The development organisation said global gross domestic product will probably increase 4.1 per cent in 2022, lower than a 4.3 per cent forecast in June.

By 2023, annual output is expected to remain below the pre-pandemic trend in all regions with emerging-market and developing economies, while in advanced economies, the gap is estimated to close, it said.

“There is there a serious slowdown underway,” Ayhan Kose, the chief economist of the Prospects Group at the institution, told Bloomberg. The global economy “is basically on two different flight paths: advanced economies are flying high; emerging-market, developing economies are somewhat flying low and lagging behind”.

The global outlook is clouded by what World Bank Group President David Malpass termed “exceptional uncertainty”. Downside risks include renewed Covid-19 outbreaks, the possibility of de-anchored inflation expectations, and financial stress in a context of record-high debt levels.

In emerging markets with limited policy space to provide support, the risks heighten chances of a hard landing for their economies, the World Bank said.

ALSO READ-World Bank announces $300 mn rehabilitation fund for Ethiopia

Categories
Business

Infosys logs fastest growth in decade

Infosys’ Q4 sequential growth was 1.2 per cent in constant currency with operating margin of 21.5 per cent. TCV of large deal wins was $2.3 billion in Q4…reports Asian Lite News

Infosys, India’s leading IT services provider, on Wednesday reported a net profit of 12 per cent to Rs 5,686 crore for the quarter ended March 31.

An official communication stated on Wednesday that the growth was broad-based, supported by continued momentum in large deal wins with a TCV of $9.5 billion.

Infosys had reported a profit of Rs 5,076 crore in the corresponding quarter of the previous year.

The company delivered $16.3 billion in revenues with the highest annual growth in the last decade of 19.7 per cent in constant currency with a robust operating margin of 23 per cent.

Its EPS grew by 15.2 per cent in rupee terms, while FCF crossed $3 billion for the year.

Infosys’ Q4 sequential growth was 1.2 per cent in constant currency with operating margin of 21.5 per cent. TCV of large deal wins was $2.3 billion in Q4.

“Infosys delivered the highest annual growth in a decade with broad-based performance driven by deeply differentiated digital and Infosys Cobalt led cloud capabilities, powered by the ‘One Infosys’ approach. We continue to gain market share as a result of sustained clients’ confidence in our ability to successfully navigate their digital journeys,” said Salil Parekh, CEO and MD, Infosys.

“With the acceleration of digital disruptions across industries, we see immense potential to engage and partner with clients as they transform, adapt and thrive. We will scale talent globally, invest in employees and accelerate innovation and digital,” he added.

“In a year marked by intense supply-side challenges, Infosys delivered strong financial performance – EPS growth of 15.2 per cent, free cash flows surpassing $3 billion and return on equity of 29.1 per cent, reflecting the company’s success, driven by client-centricity and rich capabilities. The Board has proposed a final dividend of Rs 16 per share, taking the total dividend for FY22 to Rs 31 per share, an increase of 14.8 per cent over prior year,” said Nilanjan Roy, CFO, Infosys.

“With a robust demand environment ahead, we envisage making appropriate long-term investments in capability building across sales, delivery and innovation. However, we plan to neutralise some of the impact through aggressive cost optimisation programmes and value-led pricing driven by service and brand differentiation. This, along with post-pandemic normalisation of expenses, is reflected in the margin guidance,” he added.

ALSO READ-Infosys, Rolls-Royce tie up in aerospace sector

Categories
Business Economy India News

RBI to prioritise growth over inflationary fears


On the contrary, fuel and power inflation came in at a 10-month low of 8.7 per cent YoY in February 2022…reports Asian Lite News

The Reserve Bank of India (RBI) is expected to prioritise growth over inflationary fears in its April, 2022 policy meet.

Notably, the consumer price index (CPI) inflation print has remained at elevated level due to higher-than-expected vegetable prices in February.

Moreover, inflation is expected to remain at elevated levels due to higher crude oil price in subsequent months owing to the Russia-Ukraine crisis.

“Nevertheless, we still expect the RBI to prioritise growth in its April 2022 monetary policy meet as we believe growth is still a bigger concern currently rather than inflation,” said Motilal Oswal Financial Services.

“We expect inflation in the range of 5.2-5.4 per cent YoY in FY22.”

Earlier this month, CPI inflation came in at an eight-month high of 6.1 per cent YoY in February 2022.

Besides, food inflation came in at a 15-month high of 5.8 per cent YoY in February 2022 versus 5.4 per cent YoY a month ago.

“Within food, vegetables primarily caused the spike in inflation as excluding vegetables, CPI came in at 6.1 per cent YoY similar to the level seen in January 2022.”

“Other items such as cereals and products, meat and fish, spices, and sugar and confectionary that constitute 17 per cent weight in CPI index also contributed to higher inflation.”

On the contrary, fuel and power inflation came in at a 10-month low of 8.7 per cent YoY in February 2022.

Furthermore, core inflation stood at 6.2 per cent YoY for the fifth consecutive month in February 2022.

“All three components of core inflation remained broadly flat with no major movement.”

“Slightly higher inflation in housing, and clothing and footwear was offset by marginally low inflation in miscellaneous items.”

ALSO READ-Rahul Bajaj: An extraordinary life

Categories
-Top News Economy World News

IMF: War hits global growth

The IMF chief also warned that “if we are in a situation in which we cannot overcome tensions rapidly, we may see some negative impact on the multilateral capacity to cushion countries against crisis”…reports Asian Lite News

The International Monetary Fund (IMF) will likely downgrade its global growth forecast next month due to spillover effects from the Ukraine crisis, Managing Director Kristalina Georgieva said.

The economic fallout of the ongoing crisis is being transmitted through three key channels to the rest of the world: higher commodity prices, the impact on real incomes and the real economy, as well as the impact on financial conditions and business confidence, Georgieva told reporters at a virtual media roundtable on Thursday.

“Financial conditions have been already tightening in many countries with this pressure from especially oil and gas prices,” Georgieva said, adding those tightening measures might “go faster and go further” due to higher inflation, Xinhua news agency reported.

  “And particularly troubling for emerging markets that may see the combined impact of a dent on business confidence and tightening conditions putting them in a more troubled place,” she said.

  The IMF chief also warned that “if we are in a situation in which we cannot overcome tensions rapidly, we may see some negative impact on the multilateral capacity to cushion countries against crisis”.

  “So our job at the Fund is to make sure that we keep the membership together because we live in a more shock prone world and we need strength of the collective to deal with shocks to come,” she added.

 Gita Gopinath, the IMF’s First Deputy Managing Director, believed that the global system “will change in important ways” in the aftermath of the Ukraine crisis.

  “You can see the change in the energy sector and you are seeing changes happening in terms of payment systems around the world,” Gopinath said, noting the current events could accelerate transitions towards central bank digital currencies and have important implications of what reserves countries decide to hold.

  “It’s too early to tell how all of this will play out but I think it’s fair to say that there are some important consequences for the global economy.”

  In an update to its World Economic Outlook report in January, the IMF had projected the global economy to grow by 4.4 per cent in 2022, down by 0.5 percentage point from October’s forecast.

Sudan Crisis

The markets in the Sudanese capital are witnessing a state of confusion and paralysis due to the ongoing depreciation of the Sudanese pound against foreign currencies.

A tour for Xinhua of Al-Sajana Market, west of Khartoum, Khartoum 2 Market in central Khartoum, and the Central Market, south of Khartoum, revealed that most shops has stopped selling products due to inability to determine their prices.

Building materials shops in Al-Sajana Market, the most famous market for building materials in Khartoum, were particularly affected, where most of the traders refrained from selling their merchandise.

“I have no choice but to stop selling, whereas prices are changing around the clock due to the great collapse of the (Sudanese) pound,” Azhari Khalid, a major supplier of building materials and owner of a store at Al-Sajana Market, told Xinhua.

“We fear to sustain a loss that causes us to exit the market if we decide to take the risk of selling the goods in our hand, because it is certain that their prices will double the next day,” he noted.

Meanwhile, at Khartoum 2 Market, new brands of mobile phones have disappeared, most notably the recent generations of iPhone and Samsung.

“It is natural that modern brands of mobile phones disappear under the confusion which prevails in the market,” Ahmed Zahi, owner of mobile phones and computers store at Khartoum 2 Market, told Xinhua on Friday.

“For instance, a week ago, we sold iPhone 12 for 650,000 Sudanese pounds, which equal to exactly 1,400 U.S. dollars. If we sell the same phone at the same price now, it will only worth roughly 1,000 dollars,” Zahi said.

The situation was similar at the auto spare parts shops in Khartoum 2 Market, where market traders declined to sell their merchandise.

“We import spare parts in foreign currencies and are unable to sell them due to the (Sudanese) pound’s drop in value and the difficulty to sell them in foreign currencies. We have no choice but to stop the sale until the exchange rate of the national currency stabilizes,” Salaheddin Metwally, a sales manager at Al-Nasr Auto Spare Parts Company, told Xinhua on Friday.

Consumer goods prices have risen dramatically at the Central Market, raising concerns as the holy month of Ramadan approaches.

A sack of sugar (50 kilos) jumped from 18,000 Sudanese pounds to 25,000 pounds, while the price of edible oil (36 pounds) registered 24,000 pounds instead of 17,000 pounds about two weeks ago.

In the meantime, the Sudanese pound has continued to fall sharply against foreign currencies, with the parallel market’s exchange rate of one U.S. dollar to 600 Sudanese pounds on Thursday, compared to the official exchange rate of 585 pounds.

Sudan has been facing an economic crisis after the United States and international agencies suspended aid with hundreds of millions of dollars after Abdel Fattah Al-Burhan, the general commander of the Sudanese Armed Forces, declared a state of emergency on Oct. 25, 2021 and dissolved the Sovereign Council.

Pound (ANI)

The United States immediately suspended 700 million U.S. dollars in economic aid to Sudan, while a budget support of 500 million U.S. dollars from the World Bank, which was expected in November 2021, and 150 million U.S. dollars in special drawing rights from the International Monetary Fund, were also halted.

Sudan’s debt relief process under the Heavily Indebted Poor Countries (HIPC) Initiative of the International Monetary Fund has also halted.

Sudan has been undergoing a dire economic crisis since the secession of South Sudan in 2011, due to which Sudan lost 75 percent of its oil revenues.

ALSO READ-Opinion divided as Russians close in on Kiev

Categories
Business India News

India’s smartwatch market sees record growth

Noise led the market in 2021 with a 27 per cent share and over 278 per cent growth. Four out of the top 10 models in 2021 were from Noise…reports Asian Lite News

India’s smartwatch market saw a record shipment growth of over 274 per cent (on-year) in 2021, and domestic brands led by Noise captured the market with over 75 per cent share, a Counterpoint Research report showed on Wednesday.

Domestic brand boAt captured the top spot in Q4 2021, which became the biggest ever quarter for smartwatches with over 8 per cent growth, according to Counterpoint’s IoT Service.

“More than 86 per cent of the total shipments were driven by the under-Rs 5,000 price band, compared to 59 per cent in the previous year,” said senior research analyst Anshika Jain.

Many of the features which were earlier present in the Rs 3,000-Rs 5,000 price band smartwatches are now found in the Rs 2,000-Rs 3,000 segment, like SPO2, blood pressure monitoring, voice assistance and larger display.

“Even features which were earlier prominent in premium smartwatches, like ECG and Bluetooth calling, can be seen in smartwatches priced under Rs 5,000,” Jain added.

Although only 1 per cent of the total smartwatches shipped were domestically assembled, this number is likely to jump many times due to duty structure changes and government push.

“Indian players led the market by capturing over 75 per cent share. The top three brands captured two-thirds of the total smartwatch market in 2021, compared to just half in 2020. The market saw over 10 new entrants in 2021, intensifying the competition,” said research associate Harshit Rastogi.

The market is estimated to grow by around 50 per cent in 2022 considering the high demand and brands’ dedicated efforts to bring additional capabilities to their devices.

Noise led the market in 2021 with a 27 per cent share and over 278 per cent growth. Four out of the top 10 models in 2021 were from Noise.

boAt captured the second spot in 2021 with a 26 per cent share. Its Storm was the best-selling smartwatch in 2021.

Fire Boltt was one of the key new entrants in the smartwatch market. It quickly managed to capture the third position with more than 20 models across price bands.

Samsung grew more than 2x in 2021 driven by its most popular model, the Galaxy Watch Active 2. The newly introduced Galaxy Watch 4 series contributed to over 16 per cent of its total shipments.

Apple remained flat in 2021 with the Watch SE contributing around 44 per cent of its total volume. The refreshed line-up of Series 7 saw a great start with shipments crossing 100,000 units in Q4 2021, said the report.

ALSO READ-Acer launches 2nd made in India laptop

Categories
Business

ECONOMIC SURVEY: India revises RE targets, witnesses fastest growth

So far, a cumulative 5.87 GW solar roof top projects have been set up in the country, the Survey said…reports Asian Lite News

India’s installed solar power capacity, as of December 31, 2021, was 49.35 GW as against the target of 100 GW in seven years starting from 2014-15 under the National Solar Mission (NSM), the Economic Survey 2021-22 said.

India revised its targets for renewable energy when Prime Minister Narendra Modi, at the annual climate conference, promised installation of 500 GW non fossil energy capacity by 2030, reduction in emissions intensity of GDP by 45 per cent over 2005 levels, 50 per cent electric installed capacity coming from non-fossil sources by 2030, 1 billion tonnes reduction in carbon emissions till 2030 and India to become net-zero by 2070.

Keeping in tune with the renewed targets, India has launched multi-pronged programmes to achieve solar and wind energy, as part of the renewable energy targets set for combating climate change.

The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) Scheme to provide energy and water security, de-dieselise the farm sector and generate additional income for farmers by producing solar power aims to add 30.8 GW of solar capacity with central financial support of over Rs 34,000 crore.

Installation of 10,000 MW of decentralised grid connected solar power plants each of capacity up to 2 MW, setting up of 20 lakh standalone solar powered agriculture pumps, and polarisation of 15 lakh existing grid-connected agriculture pumps is envisaged under the scheme that have been included by the RBI under Priority Sector Lending Guidelines for easing availability of finance.

“As of December 31, 2021 over 77,000 standalone solar pumps, 25.25 MW capacity solar power plants and over 1,026 pumps were salaried under individual pump polarisation variants. Implementation of the feeder level polarisation variant under the last component, which was introduced in December 2020, has also started in a number of states,” the Economic Survey said.

For large scale grid connected solar power projects, ‘Development of Solar Parks and Ultra Mega Solar Power Projects’ is under implementation with a target capacity of 40 GW capacity by March 2024. So far, 50 solar parks have been sanctioned with a combined capacity of 33.82 GW in 14 states. Solar power projects of an aggregate capacity of around 9.2 GW have already been commissioned in these parks.

Roof Top Solar Programme Phase-II for accelerated deployment of solar roof top systems, with a target of 40 GW installed capacity by December 2022, is also under implementation. The scheme provides financial assistance for up to 4 GW of solar roof top capacity to the residential sector and there is a provision to incentivise the distribution companies for incremental achievement over the previous year.

So far, a cumulative 5.87 GW solar roof top projects have been set up in the country, the Survey said.

A scheme for setting up 12 GW Grid-Connected Solar PV Power Projects by government entities (including Central Public Sector Undertakings) is under implementation. Viability Gap funding support is provided under this scheme. Under this scheme, the government has so far sanctioned around 8.2 GW of projects.

Till December 2021, over 1.45 lakh solar street lights were installed, 9.14 lakh solar study lamps were distributed, and about 2.5 MW solar power packs were set up as reported by state nodal agencies.

Along with this, the Ministry of New and Renewable Energy has notified the wind solar hybrid policy, providing a framework for promotion of large grid connected wind-solar PV hybrid projects for optimal and efficient utilisation of transmission infrastructure and land, reducing the variability in renewable power generation, and achieving better grid stability.

As of December 31, 2021, capacity of around 4.25 GW of wind-solar hybrids have been awarded, out of which 0.2 GW is already commissioned and additional capacity of 1.2 GW wind-solar hybrid projects are at various stages of bidding.

ALSO READ-India fourth largest forex holder in world

Categories
Business India News

AI/ML investments will continue to grow in India

Industry reports suggest that AI/machine learning investments in India will continue to grow at a CAGR of 33.49 per cent till 2023….reports Asian Lite News

 The need for skilling and upskilling reached a new high amid the pandemic and in 2022, big data analytics, along with AI/ML, are forecast to be most in-demand skills in India, a new report showed on Monday.

With rapid tech adoption across industries and entirely tech-enabled sectors such as IT and BFSI, the role of AI and Machine learning will only continue to grow in 2022, with a significant increase in the demand for related roles, according to online recruiting platform Monster.

Industry reports suggest that AI/machine learning investments in India will continue to grow at a CAGR of 33.49 per cent till 2023.

To enhance customer engagement, more and more organisations are adopting chat bots which are forecast to empower approximately 45 per cent of organisations’ customer support services by 2022.


“The future of work is location-agnostic and hybrid, with increased skilling initiatives being undertaken by both employers and employees,” said Sekhar Garisa, CEO, Monster.com, a Quess company.

Leading tech-enabled industries such as IT, FinTech, BFSI, and crypto will continue to flourish with talent demand spikes.

“It is also interesting to note that employee flexibility would be critical towards retaining talent in the future, and the Great Shuffle is a reinforcement of how the huge demand in the jobs market is opening the door for employees to select a career of their choice,” Garisa added.

The Indian fintech market is expanding rapidly, and is estimated to become the third largest market in the world by 2025.

According to the annual trends report, Indian IT has continued to hire through the course of the pandemic, and will exhibit similar trends in 2022.

“It is encouraging to note that the IT industry is forecast to grow 7 per cent in the current year, and likely to see a gross employee addition of around 450,000 in the second half of FY22,” said the report.

The top skills organisations are on the lookout for are data science, cloud computing, artificial intelligence, Blockchain and machine learning.

“The demand for sales professionals is estimated to increase especially in industries such as fintech, retail, e-commerce and social commerce,” the findings showed.

With a number of employees preferring remote working and staying in their hometowns, more and more organisations are considering setting up smaller offices in tier 2 cities or utilising co-working spaces to provide employees with better resources and access to technology.

This would, in turn, lead to an increased demand to hire across tier 2 cities in the coming months.

“Hiring for freshers has picked up over the last three months of the year, and is estimated to increase considerably in 2022. The continuing emergence of startups will further contribute to the demand for entry level professionals across industries,” the report noted.

ALSO READ: SC seeks response on plea against Haridwar hate speeches

Categories
-Top News London News UK News

CBI cuts growth forecasts

With exports still weak, household spending would drive 90% of growth next year and two-thirds of it in 2023 thanks to a strong jobs market and savings racked up during the pandemic…reports Asian Lite News.

Britain’s economy looks set to grow more slowly than previously thought this year and in 2023 due to global supply chain problems and the government must encourage longer-term business investment, an employers group said on Monday.

The Confederation of British Industry cut its forecasts for economic growth to 6.9% in 2021 and 5.1% in 2022 from previous estimates of 8.2% and 6.1%.

It said the downgrade mostly reflected weaker growth since its last forecasts in June and the supply chain problems that have slowed the recovery from last year’s coronavirus slump were likely to end in mid-2022.

With exports still weak, household spending would drive 90% of growth next year and two-thirds of it in 2023 thanks to a strong jobs market and savings racked up during the pandemic.

Business investment looked set to grow by 8.2% next year and go above its pre-pandemic level but the bounce would probably prove short-lived with corporate investment falling back in mid-2023 when a tax incentive is due to expire.

“One policy in place for 18 months can’t change under-investment over four decades,” Rain Newton-Smith, the CBI’s chief economist, said.

The CBI called on Prime Minister Boris Johnson to introduce regulations to spur investment and innovation to help build new markets in clean energy and other sectors.

The new forecasts from the group saw inflation peaking at 5.2% in April and remaining above the Bank of England’s 2% target for around another year while unemployment would fall to 3.8% by the end of 2023.

The CBI’s forecasts were made before the emergence of the Omicron variant of the coronavirus which has led to tighter Covid rules. Rain-Smith said she was hopeful that Britain’s high levels of vaccinations would minimise the growth hit.

Trade minister to seek closer ties on US trip

Britain will seek to strengthen its trading relationship with the United States this week when trade minister Anne-Marie Trevelyan visits New York and Washington, but a full free-trade agreement remains a distant prospect.

Trevelyan will meet US Trade Representative Katherine Tai and US Commerce Secretary Gina Raimondo in Washington on Tuesday, and promote Britain at a meeting with investors in New York, reported Reuters.

Despite a trade deal with the United States being touted as one of the biggest prizes of Britain’s exit from the European Union in the years following the 2016 Brexit vote, US President Joe Biden has since made clear that any such deal is not a priority for his administration. 

That has forced Britain to take a different approach of pursuing smaller agreements to remove specific trade barriers, solve long-running trade disputes, and work together on world trade reform.

Anne Marie Trevelyan MP

Trevelyan’s visit, her first since becoming trade minister in September, will pursue that strategy, including a push to resolve a long-running dispute over steel and aluminium tariffs.

Former US President Donald Trump imposed 25% and 10% tariffs on steel and aluminium imports from the EU in 2018. The tariffs were withdrawn in October of this year, but they remain in place for Britain due to its exit from the EU.

Officials in the United States and Britain last week rejected a report in the Financial Times that said talks on resolving the tariff row were stalled due to concerns about post-Brexit trade rules affecting Northern Ireland. 

ALSO READ-Wary of community spread of Omicron, US govt urges more jabs

Categories
UK News

5.9% growth projected for Italy this year

Growth chart. (File Photo: IANS)

“A stronger-than-expected second quarter explains the upward revision from the 4.5 per cent expansion forecast for 2021 in the OECD’s May Economic Outlook,” the survey said…reports Asian Lite News.

The Italian economy will grow by 5.9 per cent in 2021, and return to the levels registered in 2019 by the first half of next year, said the Organization for Economic Cooperation and Development (OECD).

In its latest Economic Survey of the country unveiled on Monday, the Organization said: “Italy’s economy is recovering steadily from the Covid crisis, thanks to the vaccination campaign and generous fiscal support to households and firms.”

After the 5.9 per cent growth projected for this year, the country’s gross domestic product (GDP) is expected to expand by 4.1 per cent in 2022, following the steep 8.9 per cent fall registered in 2020, reports Xinhua news agency.

“A stronger-than-expected second quarter explains the upward revision from the 4.5 per cent expansion forecast for 2021 in the OECD’s May Economic Outlook,” the survey said.

Addressing the presentation press conference alongside OECD Secretary-General Mathias Cormann, Italy’s Economy and Finance Minister Daniele Franco said the government was “aiming at a post-Covid growth higher than that (registered) before the pandemic-related crisis”.

“We must overcome the long stagnation, this is our main goal,” Franco said.

He said the country’s official economic forecasts and estimates of public finance targets will now be reviewed and presented in the update to the Economic and Financial Document (DEF) usually unveiled in late September.

In April, the Economy and Finance Ministry had predicted Italy’s GDP would grow by 4.5 per cent in 2021, in line with the previous OECD forecast, 4.8 per cent in 2022, and 2.6 per cent in 2023.

While presenting the report, the OECD chief noted the National Recovery and Resilience Plan provided by the Italian government would activate “stronger, greener, fairer and more digitalized growth that will benefit all Italians, with improved opportunities to get ahead”.

Presented earlier this year and passed by the European Union (EU) authorities, Italy’s National Recovery and Resilience Plan is worth 222.1 billion euros ($263 billion) overall, mostly financed through the Next Generation EU program launched in 2020 to help member states restart their economies after the Covid-19 crisis.

In the survey, the OECD said Italy’s “generous” supportive policies during the coronavirus crisis “mitigated job losses and hardship and preserved productive capacity,” and loan guarantees and moratoria on debt repayments supported firm liquidity and limited bankruptcies.

“Significant fiscal support in 2021 will buoy the near-term recovery, as vaccination rates accelerate and restrictions ease,” it predicted.

“Higher public investment, including from Next Generation EU funds, will support private sector investment, alongside higher confidence and demand… Consumption is expected to rise as households are able to consume part of their savings and employment recovers.”

Yet, the Organization recommended the country not to halt its supportive fiscal policy towards households and firms “until the recovery is firmly underway”.

“Withdrawing liquidity support too early could force otherwise viable firms into bankruptcy,” it warned.

“It would also raise unemployment and poverty, which were already high before Covid, affecting youth and women particularly.”

Once the pandemic subsides, the OECD recommended Italy to reform public spending and tax policy, among other sectors.

“Ageing-related expenses crowd out investment in infrastructure, education, and training,” penalising the young, many of whom are out of work and at risk of poverty, it said.

As for the tax policy, Italy was encouraged to reduce the complexity of the system and to lower labour taxes.

Among other recommendations, the OECD suggested Italy raise investment and productivity by cutting the stock of regulations, minimising regulatory barriers to enter professional services, and providing a long-term plan on carbon prices and supportive policies to reduce the costs of energy transition.

ALSO READ-Italy set a new European heat record