Posted at 11:04 AM , on December 6, 2016
During the week, the MOSPI announced the GDP numbers for the 2nd quarter ending Sep-2016. The GDP at 7.3% was nearly 20 basis points lower than the consensus estimate of 7.5%. If you remove the 20 basis points contributed by indirect taxes, the actual Gross Value Added (GVA) was only 7.1%. This raises serious questions for the RBI and the government policy makers. Continue reading
Posted at 4:33 PM , on December 1, 2016
The annualized GDP for the 2nd quarter ended September 2016 came in at 7.3% slightly lower than the market consensus estimate of 7.5% for the quarter. The numbers were released by the Ministry of Statistics and Program Implementation (MOSPI) on November 30th 2016… Continue reading
Posted at 4:47 PM , on December 22, 2015
Government reconciles to 7-7.5% GDP growth
After presenting a highly optimistic picture of the Indian economy, the Mid-Year economic review is more subdued and more pragmatic. The review has cut the GDP growth for fiscal 2016 to 7-7.5%, which is closer to what the RBI has always been saying. There are three key elements to the mid-year review… Continue reading
Posted at 1:02 PM , on August 24, 2015
Could we see a currency war in the world?
Will there be a currency war? That was the trending question on Twitter the day after China devalued the Yuan by 2%. To be fair, a currency war began in 2010 when countries like Japan and the EU adopted a loose money policy. The idea was to debase their currencies so that exports increased. Ironically, 2010 was also the year when the US had announced plans to double exports by 2015. But other countries debasing currencies and China debasing its currency are entirely different. First, the history of currency wars! Continue reading
Posted at 5:36 PM , on June 2, 2015
To hike or not to hike rates, gets a lot more complicated
A de-growth in US GDP is not great news for Janet Yellen. For her and the other governors of the US Federal Reserve, the decision to hike rates just gets a little more complicated. Wages and inflation are yet to pick up enough to justify a rate hike. And tapering export and GDP is only adding to the problem. There are three major challenges confronting Yellen and team.
Can US monetary policy diverge?
In practice it will be extremely difficult. Year 2008 saw a globally integrated monetary policy for the first time. Back then, most financial markets the world over were extremely fragile in the aftermath of Lehmann. A unified monetary policy was the only way out. Continue reading