This Saturday Simply Brings Exuberance. 

Wishing A Highly Spirited Day Ahead.

 

Best Regards

Arbind

 

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Macro-Economic News 30 Jan 2021

 

Hope, economy, economic activities, and local trains are getting back on track. Economy rebounding with 11% in FY22 as seen by the survey and a call to print more money are eyeing at a V-shaped recovery from a downward revision of 2019-20 GDP with a soaring fiscal deficit of Rs 11.6 trillion and eight-core-industries output contracting by 1.3% in December. With Forex kitty swelling by a billion-dollar to $585 and non-food credit growing by 5.9% in Dec, Govt may spend more to boost growth leading to sustainability. 

Most economies of Europe outshine the earlier depressing forecasts of fourth-quarter growth with resilient output despite a resurgence of pandemic and reappearance of lockdowns. The US consumer spending decreases, inflation crept up, although household income and savings rose at the end of the last year.

With a little toned down significance and gut probability, the current economic recovery can be compared with the economic expansion post world war II, at least for some learning with glaring similarities of consequences. A case in point being the US in 1944-47 ‘destimulised’ the economy from 55% of GDP in 1944 to 16% of GDP in 1947. Yet real consumption grew by 22%, almost doubled the consumption of durable goods, more than doubled the private investment, and a six-fold increase in household expenditure although, GDP shrank by 13% - a more of a computational quirk. 

There was a substantial swift of a distressed economy to prosperity. And this happened with rising private investment and household expenditure ascertaining a much superior lifestyle for a wider population in coming decades. It may happen a lot quicker than we expect and costlier than we imagine, possibly. It is no strange that Investors are misjudging the pandemic-induced risk and subsequent imposition of capital controls.

For sure, we and all nations will win this war in 2020-23 and ... ... ... 

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Fun is fuelled everywhere; Fill it. 

Wishing A Fabulous Friday Ahead.

 

Best Regards

Arbind

 

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Macro-Economic News 29 Jan 2021

 

Living with higher debt is a norm everywhere, although few warn of increasing spreads. Globally, pandemic spending has equaled the government debt to global GDP. Central banks are also supporting governments continue to spend to deal with the economic fallout of the pandemic.

 

IMF also suggests living with a higher level of debt with a change of public financing rules. World Bank also opines to win the Covid war first and then thinking to pay for it later. The surge in German inflation poses a communication challenge for ECB whilst the Italy crisis raises concerns about EU recovery spending.

 

Economists expect growth in 2021 although U.S. Economy had the worst performance since 1946, shrinking in 2020 despite fourth-quarter growth of 4.0% in the last quarter. Japan's December factory output extends declines as recovery stalls with a steady jobless rate steady at 2.9%. New Zealand inflation is accelerating to its central bank target.

 

Indian govt may go for higher external financing while gross market borrowing may be less than ₹12-lakh crore. PM tells CEOs at World Economic Forum to invest in India, a vibrant democracy with a business-friendly climate and a big market. India's rank slips to 86th in corruption perception index 2020, and Gold demand plunged to an 11-year low in 2020. Gita Gopinath opines India may not hit pre-Covid growth levels before 2025 while the 15th Finance Commission may recommend farm export incentives for states in the Budget session. Covidonomic and Farmonomic are expected to dominate this Budget session.

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 The Universe is Coordinating For Care and Caress

Wishing A Considerate Day Ahead 

 

Best Regards

Arbind

 

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Macro-Economic News 28 Jan 2021

 

Various states and nations are easing out the covid restriction on the signs of hope. Asian economy also largely depends upon the consumer reluctance to spend. Indian cabinet clears policy on PSU privatization ahead of its Union Budget while expectation from budgets includes increased investment in infrastructure, simplification of taxation rules, and emphasis on digitization.

On the other side, the shape-shifting virus threatens cycles of illness and lockdowns. More-transmissible and potentially deadlier variants of Covid-19 - first identified in Britain, South Africa, and Brazil is spreading - just as the rollout of vaccines had raised hopes for a broad-based economic recovery.

U.K. high streets are emptying at the fastest pace on record while the carmakers coming off their worse year since 1984 with production plunging by nearly 30% compared with a year ago. IMF warns about the Covid complacency and raises concerns about excessive risk-taking potentially risking global financial stability since the investor expectations for economic recovery and continued government support have fuelled gains in asset prices.

The FED continued its easy-money policies while Powell said no bond taper for ‘some time’ as recovery moderates. FED expects that vaccine would heal the economy and until then continuing its effort to boost economic activities as much it can with short term lower rate and bond-buying to support borrowing, spending, investment, and hiring. 

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Grace is Godly and It Is Everywhere

Wishing An Endearing Day Ahead 

 

Best Regards

Arbind

 

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Macro-Economic News 27 Jan 2021

Consumer confidence, economic expectations, and hope for jobs all brighten up. Restricted access to services during the pandemic has helped a significant percentage of households saving which, expectedly, would propel economic growth faster than earlier forecasts. 

Yellen emphasizes, “Economics isn’t just something you find in a textbook. We can -- and should -- use it to address inequality, racism, and climate change.”

IMF raises global economic growth forecast for 2021 but still sees 'exceptional uncertainty' lowering the contraction estimate by 2.3 percent for the current fiscal. The latest World Economic Outlook of IMF expects the US and China to recover most strongly. Interestingly companies raised $400bn over three weeks in a blistering start to 2021. 

ECB policymakers have agreed to look deeper into the EURO's appreciation against the dollar and focus if it is driven by differences in stimulus policies. Although warning about a possible asset bubble, China’s central bank withdrew cash from the banking system. 

IMF sees India as the fastest growing economy in FY22 although expects to contract 8% this fiscal. FICCI survey also forecasts 8% GDP contraction in FY21. While India is likely to double health spending in the next fiscal year to 4% of gross domestic output in the coming four years.

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Here comes the Monday with Magnificence

Wishing A Miraculous Week Ahead 

 

Best Regards

Arbind

 

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Macro-Economic News 25 Jan 2021

 

The U.S. braces for more corporate prosecutions while in 2020, new investments by overseas businesses into the U.S., which for decades held the No. 1 spot, fell 49% in 2020. The FED is expected to leave policy unchanged as Chairman Jerome Powell is likely to underscore the central bank’s commitment to supporting the economy with low rates and continued bond purchases for the foreseeable future.

 

Emerging markets that are gripped by greed are now turning to FED for the fresh spur. However, some investment managers are raising concerns over the brewing of pain-trade for ‘growth-at-any-price’ investors and economists about central banking leading to bubbles everywhere.

 

2020 can be characterized by cheap money, flooding from the world’s major central banks, inflating assets. And this time, unlike the previous easings including 'taper-tantrum', policymakers are explicit and vividly clear in continuation of their loose policies. This cushioning of market volatility has an inevitable side effect of asset mispricing leading to more volatility ahead. Economic stability becomes vital before risks overtake enthusiasm in the dynamics of ‘economy-of-hope’.

 

Interestingly enough central bankers and legislators are well aware of the danger of surging valuations out of trillions of dollars in fiscal stimulus and other monetary support by lowering the return of safe assets for increasing demand of risky assets. And this is well enough as the cost of doing something appears to be less than the cost of NOT doing anything. Curious is the fact that the wealth of the world’s 500 richest people added nearly two trillion to their combined net worth.

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