Winning Bizness Economic Desk

Goldman Sachs Group Inc has revised southwards the country’s GDP growth forecasts for the years 2024 and 2025. The growth forecasts have been trimmed by 20 basis points (bps) or 0.20 per cent for both this year (2024) and the next (2025).

The bank has done this citing a contraction in central government expenditure.

Goldman Sachs now expects the country’s economy to expand at 6.7 per cent in calendar 2024 and 6.4 per cent in 2025.

This year’s downgrade factors a 35 per cent Year-on-Year (YoY) contraction in government expenditure during the April-June quarter that coincided with the weeks-long general election in the country, Goldman Sachs’ economists wrote in a report.

Next year, the country’s growth would be adversely affected by the government’s commitment in the budget to reduce the fiscal deficit to below 4.5 per cent of gross domestic product.

Expansion will also confront headwinds from slower real consumption growth driven by a slowdown in household credit due to the RBI’s stricter rules to control unsecured lending by banks, the economists said.

However, an easier monetary policy may offset some of the drag on real GDP growth next year as Goldman Sachs expects the Reserve Bank of India “to start its easing cycle in December 2024.”

India’s Forex Reserves Vault USD 4.546-bn

The country’s foreign exchange reserves have vaulted by USD 4.546-billion to USD 674.664-billion during the week ended August 16, data from the Reserve Bank of India (RBI) showed.

The forex reserves had slid southward by USD 4.8-billion in the previous week to USD 670.119-billion.

Here, it must be pointed out that on August 2, the overall reserves had hit an all-time high of USD 674.919-billion.

In the week-ended August 16, Foreign Currency Assets (FCAs), a major component of the reserves, increased by USD 3.609-billion to USD 591.569-billion, the Reserve Bank of India’s data showed.

Expressed in dollar terms, FCAs include the effect of appreciation or depreciation of non-US units such as the Euro, Pound and Yen held in the foreign exchange reserves.

Gold reserves climbed northward by USD 865-million to USD 60.104-billion during the week-ended August 16.

The Special Drawing Rights (SDRs) were up by USD 60-million to USD 18.341-billion.

India’s reserve position with the International Monetary Fund (IMF) was up by USD 12-million to USD 4.65-billion during the week, the Reserve Bank of India data showed.

Gems, Jewellery Exports Decline 21.9 Per Cent in July: GJEPC

The country’s overall gem and jewellery exports registered a 21.93 per cent Year-on-Year (YoY) fall in July to USD 1,665.4-million (Rs 13,922.03-crore), the Gem and Jewellery Export Promotion Council (GJEPC) said.

According to the trade body’s data, the overall exports in the category in July of last year (2023) stood at USD 2,170.71-million.

“The exports are mainly affected due to the decline in demand following geo-political disturbance in key markets like the US and China. The demand in the China market has drastically slowed down due to a struggling economy,” the GJEPC’s chairman Mr Vipul Shah told a leading media outlet.

The overall export of cut and polished diamonds (CPD) slid 21.34 per cent last month to USD 907.67-milllion from USD 1,174.41-million in the year-ago period.

Here, it is important to point out that gold jewellery exports also registered a 10.53 per cent decline in July to USD 530.38-million as compared to the USD 603.12-million in the same period of the last year.

The trade body stated that during the recent six-day India International Jewellery Show (IIJS) Premiere 2024, held from August 9-13, business worth USD 12-billion (around Rs 1-lakh-crore) was generated.

IIJS Premiere 2024 attracted over 50,000 buyers and international delegations from over 13 countries, including Cambodia, Iran, Japan, Malaysia, Nepal, Russia, Saudi Arabia, Sri Lanka, Thailand, Turkey, the United Kingdom (UK) and Uzbekistan.

Indian Steel Sector’s Tech Investment Likely To Touch USD 2.7-bn by 2030

Investments in process and digital technologies across the steel value-chain in India are expected to increase up to USD 2.7-billion by the end of this decade (2030), a report pointed out.

These investments will advance technological capabilities and drive progress towards a more efficient and sustainable mining and steel industry, the FICCI-Deloitte report stated.

“The investment in process and digital technologies across the steel value-chain in India is projected to increase from USD 1.12-billion in 2024 to USD 2.3-to-2.7-billion by 2030, excluding ERP upgrades,” the report on `Automation, Digitalisation and Technology Upgradation for the Indian Mining and Steel sector, stated.

2030 is significant for the domestic steel industry as the government’s National Steel Policy 2017 aims to scale-up the country’s installed steel-making capacity to 300-million tonnes by then.

The per capita steel consumption, as per the report, is anticipated to reach 160-kg by 2030 and around 220-kg by 2047.

Digital tools can assist to enhance compliance with environmental regulations through better emerging efficiency and emission monitoring, it stated.

Additionally, digital technologies offer both the flexibility and scalability necessary to adapt to market change, drive innovation and improve worker safety, the report said.

It also pointed out that interacting digital technology across the value-chain can thus unlock transformative capabilities.

Karnataka Government Approves Sale of Land in Ballari to JSW Steel

The Karnataka cabinet has approved the execution of an absolute sale deed for the proposed sale of 3,667.31-acres of land to JSW Steel in Ballari district.

The execution was completed under legal compulsions, the state’s Minister of Law and Parliamentary Affairs, Mr H K Patil, said.

“The government is under “legal compulsions” to complete the sale deed. There is a writ of mandamus and we’ve decided to execute the sale deed,” Mr Patil said.

Here, a point to note is that earlier Mr Patil was a vocal opponent of the transfer of land to the company and had called for a re-examination of the proposal in 2019.

The decision to execute the sale deed came after the steel company approached the court seeking an order directing the state government to honour the sale-cum-lease agreement.

The cabinet has also given in-principle clearances to two infrastructure projects in Bangalore, the capital of Karnataka.

These two are a 250-feet sky deck for Rs 500-crore and an underground 18.5-kilometre tunnel from Hebbal to Central Silk Board Junction on Hosur road which will cost Rs 12,690-crore.

Denmark’s Rockwool to Invest Rs 550-cr in TN

Denmark-based Rockwool plans to set up its biggest factory in India in the southern state of Tamil Nadu at an outlay of Rs 550-crore.

Rockwool is one of the leading insulation producers across various segments and reported revenues of Euro 3.6-billion. The company has a presence in 40 countries worldwide.

The new factory is expected to come up at Cheyyar, about 90-kilometres distant from Chennai in Tiruvanamallai district. This factory will be in addition to the company’s already existing one in Dahej, Gujarat.

The new factory in Tamil Nadu will help boost revenue from the Indian market in the group’s global turnover.

Rockwool Board’s Chairman Mr Thomas Kahler, its Asia Managing Director Mr Darryl Mathews and India Business Unit Director Mr Vinay Pratap Singh met the state’s chief secretary Mr N Muruganandham at the Secretariat to discuss the company’s plans in the state.

“We started our operations in Gujarat in 2011 and we are setting up our second factory in Cheyyar SIPCOT Industrial Park at Euro 55-million (Rs 550-crore). Our plan to set up a new factory in Tamil Nadu is a natural progress in the region as the state is leading in many sectors and also accounts for one-third of India’s GDP,” Mr Mathews was quoted in the media as saying.

The factory would come up on a 56-acre plot of land in Cheyyar.

It will recruit about 150 people which will produce about 50,000-tonnes of Rockwool’s non-combustible, re-cyclable and long-lasting stone wool insulation materials similar to the factory in Gujarat.

The Gujarat factory meets about 90 per cent of the local demand while the facility in Tamil Nadu would be used only to serve the domestic market.