17 Dec 2014

UN forecasts 6.3% plus for India in 2016


To help state-owned banks meet the Basel III capital norms by 2019, the government plans to sell down its investment in 27 banks to 52% from current levels of 57 to 84%. The plan is to generate some $26mil in capital for the treasury as well as giving the banks concerned the scope to raise additional public capital. The UN is forecasting India’s GDP to grow by 6.3% in calendar 2016, making it the fastest growing economy in South Asia. Meanwhile, the news on inflation continues to improve: November’s CPI contracted more than expected to 4.4%, as food prices appreciated by just 3.6% (vegetables in reverse by 10.9%). Core inflation fell back from 5.8% to 5.5%. October IIP contracted by 4.2%; the big contributor was -18% in Consumer Goods, due to a huge drop in mobile phones and accessories after Nokia closed a production facility. Public holidays also had an effect: five instead of last year’s two.

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