The Indian economy faces risks from the external sector, as foreign capital inflows could be hurt by US Federal Reserve monetary tightening while concerns about elevated global energy prices cloud the near-term outlook, the Indian Ministry of Finance said in a monthly report released on Saturday.
“On the one hand, the Federal Reserve continues to be aggressive in the fight against inflation, thereby signaling further interest rate hikes. This may lower capital inflows, increase pressure on the rupee to depreciate and make imports of essential commodities costlier,” the report said.
“On the other hand, an unfavorable global economic outlook is bound to moderate the growth of exports, affecting the country’s trade balance,” it added.
Photo: Reuters
Earlier this month, the IMF flagged headwinds for India and lowered its growth forecast by 0.6 percentage points to 6.8 percent for the year to March next year — the biggest downgrade among major economies after the US.
The rupee has fallen to its lowest on record against the US dollar, losing more than 10 percent against the greenback so far this year. The weakness has triggered concerns about rising costs to import commodities, including crude oil, a bulk of which India buys from abroad.
Inflation is hovering at about 7 percent, which is above the Indian central bank’s target range of 2 to 6 percent.
Photo: Bloomberg
The finance ministry report said there were signs that prices have peaked, with food inflation expected to moderate as the harvesting and procurement seasons progress.
That should contribute to a declining headline retail inflation in the rest of the fiscal year, it said.
Indian Prime Minister Narendra Modi’s Bharatiya Janata Party is heading into elections in his home state of Gujarat and in the northern state of Himachal Pradesh later this year amid continuing discontent over unemployment and high inflation.
General elections are due to take place in the first half of 2024.
Modi is under pressure to show that he is making progress on his election promise of creating millions of jobs. The country has seen sporadic violence over unemployment after angry young people blocked rail traffic and highways, and set a train on fire over a military recruitment plan.
Modi on Saturday handed employment letters to 75,000 people at a virtual event as he looks to tackle India’s soaring jobless rate.
“Central government is working on multiple fronts simultaneously to create more and more jobs,” Modi said at the event, which connected several cities across the country where his ministers were handing out appointment letters to young people.
Data from the Centre for Monitoring Indian Economy show that the unemployment rate has stayed above 6.5 percent since October last year.
The country added 1 million jobs in the formal sector last year. It recruited just 0.3 percent of the candidates who applied for permanent government jobs in the past eight years, highlighting the unemployment crisis.
OpenAI has warned US lawmakers that its Chinese rival DeepSeek (深度求索) is using unfair and increasingly sophisticated methods to extract results from leading US artificial intelligence (AI) models to train the next generation of its breakthrough R1 chatbot, a memo reviewed by Bloomberg News showed. In the memo, sent on Thursday to the US House of Representatives Select Committee on China, OpenAI said that DeepSeek had used so-called distillation techniques as part of “ongoing efforts to free-ride on the capabilities developed by OpenAI and other US frontier labs.” The company said it had detected “new, obfuscated methods” designed to evade OpenAI’s defenses
NEW IMPORTS: Car dealer PG Union Corp said it would consider introducing US-made models such as the Jeep Grand Cherokee and Stellantis’ RAM 1500 to Taiwan Tesla Taiwan yesterday said that it does not plan to cut its car prices in the wake of Washington and Taipei signing the Agreement on Reciprocal Trade on Thursday to eliminate tariffs on US-made cars. On the other hand, Mercedes-Benz Taiwan said it is planning to lower the price of its five models imported from the US after the zero tariff comes into effect. Tesla in a statement said it has no plan to adjust the prices of the US-made Model 3, Model S and Model X as tariffs are not the only factor the automaker uses to determine pricing policies. Tesla said
Australian singer Kylie Minogue says “nothing compares” to performing live, but becoming an international wine magnate in under six years has been quite a thrill for the Spinning Around star. Minogue launched her first own-label wine in 2020 in partnership with celebrity drinks expert Paul Schaafsma, starting with a basic rose but quickly expanding to include sparkling, no-alcohol and premium rose offerings. The actress and singer has since wracked up sales of around 25 million bottles, with her carefully branded products pitched at low-to mid-range prices in dozens of countries. Britain, Australia and the United States are the biggest markets. “Nothing compares to performing
AUSPICIOUS TIMING: Ostensibly looking to spike the guns of domestic rivals, ByteDance launched the upgrade to coincide with the Lunar New Year China’s ByteDance Ltd (字節跳動) has rolled out its Doubao 2.0 model, an upgrade of the country’s most widely used artificial-intelligence (AI) app, the company announced on Saturday. ByteDance is one of several Chinese firms hoping to generate overseas and domestic buzz around its new AI models during the Lunar New Year holiday, which began yesterday, when hundreds of millions of Chinese partake in family gatherings in their hometowns. The company, like rival Alibaba Group Holding Ltd (阿里巴巴), was caught off-guard by DeepSeek’s (深度求索) meteoric rise to global fame during last year’s Spring Festival, when Silicon Valley and investors worldwide were
RSS