India’s economy grew at the slowest pace in more than two years last quarter as domestic demand weakened and the global recovery faltered, adding pressure on the central bank to lower interest rates.
GDP rose 6.1 percent in the three months through December last year following the previous quarter’s 6.9 percent climb, the Indian Central Statistical Office said in a statement in New Delhi yesterday. The median of 29 estimates in a Bloomberg News survey was for a 6.3 percent advance.
The Reserve Bank of India (RBI) has signaled its readiness to join nations from Brazil to Indonesia in cutting borrowing costs to aid the economy as price rises ease, saying steps to curb the fiscal deficit in this month’s budget would boost its scope to act. Borrowing costs are at their highest level since 2008 to fight inflation, sapping expansion as policy gridlock hurts investment.
“Growth will remain subdued in the next few quarters,” said Sonal Varma, a Mumbai-based economist at Nomura Holdings Inc. “Slowing growth and cooling inflation are creating conditions for the RBI to cut rates, but a larger budget deficit is limiting the central bank’s space.”
Asian officials are striving to weather the impact of Europe’s debt crisis on the world economy, which remains in “the danger zone,” according to IMF Managing Director Christine Lagarde. Growth slowed last quarter in nations such as China and South Korea as exports moderated.
The RBI’s record 3.75 percentage points of increases in the repurchase rate from March 2010 to October last year, to 8.5 percent, also crimped expansion in Asia’s third-largest economy.
Manufacturing in India rose 0.4 percent in the three months through December from a year earlier, slower than the 2.7 percent gain in the previous quarter, yesterday’s report showed.
Indian inflation eased to a 26-month low of 6.55 percent in January, after exceeding 9 percent for most of last year.
RBI Governor Duvvuri Subbarao reviews rates on March 15, the day before Indian Finance Minister Pranab Mukherjee unveils the budget for the next fiscal year. The government forecasts GDP could rise 6.9 percent in the year through this month, the least since 2009.
The bank on Jan. 24 cut the amount of deposits lenders need to set aside as reserves for the first time since 2009, seeking to ease a cash squeeze.
It said inflationary threats, such as the fiscal deficit and energy prices, made it “premature” to start reducing borrowing costs, while reinforcing guidance that future rate actions would be towards lowering them.
The fiscal shortfall could surge to 6.1 percent of GDP in the year to this month, according to Nomura Holdings Inc and Kotak Mahindra Bank Ltd, exceeding Mukherjee’s goal of 4.6 percent. Slower growth has hurt tax receipts even as subsidies and an employment guarantee program for rural workers spurs spending.
“The major priority for macro-economic stability and reviving growth today is fiscal consolidation,” said Rupa Rege Nitsure, an economist at state-owned Bank of Baroda in Mumbai.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained