Current Affairs March 2020 - Economic
1 - UN economists forecast drop of up to 15% in FDI worldwide due to Novel Corona virus outbreak
According to a report from the United Nations Conference on Trade, Investment and Development (UNCTAD), the rapid spread of the deadly Novel Corona virus is expected to take a serious toll on foreign direct investments worldwide, with UN economists forecasting a drop of up to 15%.
The UN agency pointed to estimates that growth in the global economy will slow between 0.5 and 1.5 percent this year, depending on whether the outbreak is reined in during the first half of this year or if it rages through the end of 2020.
2 - FDI inflows recorded highest ever for fiscal year 2018-19
The total Foreign Direct Investment (FDI) inflow was over 318 billion US dollars between 2014 and September 2019 representing nearly 50% of the cumulative FDI in India since April 2000. In 2018-19, the FDI inflow stood at a record 62 billion US dollars, highest ever recorded for a fiscal year.
The initiative of FDI was launched in 2014 for promoting India as an important investment destination and a global hub for manufacturing, design and innovation.
3 - Moody’s cuts G-20 growth outlook to 2.1%
Moody’s Investors Service reported that G-20 countries are expected to grow by 2.1% in 2020. Moody’s cuts 0.3% points lower than its previous forecast, due to global spread of the coronavirus and its impact in simultaneous supply and demand shocks and slow economic activity.
Moody’s Investors Service revised its baseline growth projections for India from 5.4% to 5.3% in 2020 and from 5.2% to 4.8% for China due to Covid-19 outbreak. Moody's Investors Service is a leading provider of credit ratings, research, and risk analysis.
4 - AdGlobal360 acquired by Japanese company Hakuhodo
Hakuhodo Inc, Japan’s second largest advertising company has acquired AdGlobal360 for an undisclosed sum. Adglobal360 was ranked as the fastest growing MarTech Company in 2019 by Deloitte.
AdGlobal360 is headquartered in Gurgaon with employee strength of over 460. It provides a wide array of services to Indian and international clients, from building digital marketing strategies to creative and content production, digital media planning and buying, social media management and system development, all in one stop.
5 - GST rates on mobile phones increased to 18% from 12% w.e.f. 1st April
The Goods and Services Tax Council has increased the GST rates on mobile phones to 18% from 12% with effect from 1st of April. The Council also decided to slash GST on maintenance, repair and overhaul services for aircraft to 5% from 12%.
The tax rate on handmade and machine-made matchsticks has been rationalized to 12%. Interest will be levied on net tax liability from 1st of July for delayed GST payments.
6 - Coronavirus drags China's FDI down 8.6% in Jan-Feb
Foreign direct investment into China fell 8.6% in the first two months of 2020 amid combined impacts of coronavirus and the extended Chinese New Year holidays.
The total FDI was 134.4 billion yuan, about USD 19.2 billion for January and February. A breakdown of the data showed FDI inflows climbed 4% year on year in January but plunged 25.6% in February. The burst of corona virus has led to a complex and grim FDI situation for the whole year along with increasing downward pressure on the world economy.
7 - India's forex reserves rise 5.69 bn to 487.23 bn
India's foreign exchange rose by 5.69 billion US dollars to reach an all-time high of 487.23 billion dollars in the week ended 6th March 2020. Foreign currency assets, a major part of the overall reserves rose by 5.311 billion dollars to 451.135 billion dollars.
Gold reserves also increased by 320 million dollars to 31 billion dollars. India's special drawing rights with the International Monetary Fund went up by 15 million dollars to 1.447 billion dollars, while the country's reserve position also increased by 50 million dollars to 3.656 billion dollars.
8 - SpiceJet signed agreement with GMR Hyderabad Aviation SEZ
SpiceJet has signed an agreement with GMR Hyderabad Aviation SEZ Limited (GHASL) for setting up a warehousing, distribution and trading facility in the airport operator's aerospace and industrial park. The facility will be initially spread over in 33,000 sq feet area.
The facility will come up within the Free Trade Warehousing Zone of multi-product special economic zone (SEZ). GAHSL is a fully-owned subsidiary of GMR Hyderabad International Airport Ltd (GHIAL).
9 - Digital Solutions Exchange “GOKADDAL” launched in India
GOKADDAL, world's first Digital Solutions Exchange in the cloud has been launched in India. It is a one of its kind solutions aggregator, marketplace and cloud delivery platform with focus on four A's: Automation, Artificial Intelligence, Analytics and Augmentative Technologies.
The cloud delivery platform is expected to revolutionize the way digital solutions are sourced, delivered and managed. GOKADDAL Technologies is a Dubai based emerging technology company. GOKADDAL is led by Ravinder Pal Singh, Ex Cisco and Dell Executive.
10 - Gold imports dip 8.86% during Apr-Feb 2020
Gold imports fell by 8.86% to $27 billion (about Rs 1.90 lakh crore) during April-February 2019-2020. Gold import was $29.62 billion in the corresponding period of 2018-19.
The dip in gold imports has helped in narrowing the country's trade deficit to $143.12 billion during April-February period of the current fiscal, as against $173 billion a year ago. India is the largest importer of gold. The CAD is the difference between inflow and outflow of foreign exchange.
11 - 7.1% CAGR recorded in trade with India’s FTA and PTA partner countries
An internal assessment of India’s bilateral Free Trade Agreements (FTAs) or Preferential Trade Agreements (PTAs) with Sri Lanka, Afghanistan, Thailand, Singapore, Japan, Bhutan, Nepal, Republic of Korea and Malaysia revealed that the cumulative average growth rate (CAGR) in trade with these partners over the last 5 financial years was 7.1%. While there has been growth rate in both imports and exports to these FTA partners, the utilization rate of FTAs has been moderate.
The review of the trade agreements is undertaken on the basis of mutual consent of the trading partners and demand from domestic stakeholders.
12 - India’s merchandise exports increased to 330. 07 US$ billion in 2018-19
India’s merchandise exports have increased from 303.53 US$ billion in 2017-18 to 330. 07 US$ billion in 2018-19, registering a positive growth of 8.75%. Exports have been growing on a secular basis since 2016-17 for almost three years and total exports reached a new peak of more than half a trillion dollars for the first time in 2018-19.
The Foreign Trade Policy (2015-20), launched on 1st April 2015, provided a framework for increasing exports of goods and services as well as generation of employment.
13 - L&T Services and IIT-Kanpur collaborated for research in industrial cyber security
L&T Technology Services Limited signed a multi-year Memorandum of Understanding (MoU) with the Indian Institute of Technology - Kanpur to collaborate on research in industrial and infrastructure cybersecurity.
According to the MoU, LTTS and IIT-Kanpur will together set-up a Center of Excellence (CoE) in the IIT-Kanpur campus and conduct research in the areas of Honeypot (network-attached system set up to entrap cyberattacks and study hacking attempts), intrusion detection systems, malware analysis, blockchain, vulnerability assessment and penetration testing and provide cybersecurity awareness and training programs.
14 - India’s growth forecast lowered to 5.2% by S&P for FY 2020
S&P Global Ratings reduced India’s economic growth forecast from 5.7% to 5.2% for financial year 2020 due to outspread of coronavirus costing economies worldwide. S&P had earlier estimated India's GDP growth rate at 6.5%. S&P Global ratings have estimated that there will be total and permanent income loss of around USD 620 billion for Asia-Pacific from COVID-19. COVID-19 is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2).
Some other rating agencies have also lowered growth projections such as Moody’s lowered GDP projections to 5.3%, while Organization for Economic Co-operation and Development to 5.1%.
15 - GST Collections for February 2020
The gross GST revenue collected in the month of February, 2020 is ₹ 1,05,366 crore of which CGST is ₹ 20,569 crore, SGST is ₹ 27,348 crore, IGST is ₹ 48,503 crore (including ₹ 20,745 crore collected on imports) and Cess is ₹ 8,947 crore (including ₹ 1,040 crore collected on imports). The total number of GSTR 3B Returns filed for the month of January up to 29th February, 2020 is 83.53 lakh.
The total revenue earned by Central Government and the State Governments after regular settlement in the month of February, 2020 is ₹ 43,155 crore for CGST and ₹ 43,901 crore for the SGST.
16 - Fitch Ratings slashed India’s GDP growth rate to 5.1% for FY21
Fitch Ratings revised India's real GDP growth projection for 2020-21 downwards to 5.1% from 5.6%. The estimations for reduction in GDP growth is due to impact of Covid-19 on Indian manufacturers after supply chain disruptions in China, non-availability of raw materials and intermediate inputs and reduced demand for exports.
Coronavirus disease 2019 (COVID-19) is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The disease spread globally, resulting in the 2019–20 coronavirus pandemic.
17 - US Senate passed 2.2 trillion-dollar economic rescue package
The United States Senate has passed an unparalleled 2.2- trillion-dollar economic rescue package steering aid to businesses, workers and health care systems engulfed by the Corona virus pandemic. The 880-page measure is the largest economic relief bill in US history.
The package consists of five major measures: cash payments of up to twelve hundred dollars for almost all Americans; an expansion of the unemployment-insurance system; US$ 360 billion assistance program for small businesses; YS$ 500 bailout fund for big businesses and hundreds of billions of dollars in emergency funding for states, hospitals, and other medical providers.
18 - Moody’s slashed India GDP growth in 2020 to 2.5 %
Moody's Investors Service slashed its estimate of India's GDP growth during 2020 calendar year to 2.5%, from an earlier estimate of 5.3% as the Corona virus pandemic will cause unprecedented shock to the global economy.
As per the Global Macro Outlook 2020-21 of Moody's, India is likely to see a sharp fall in incomes at the estimated 2.5% growth rate, further weighing on domestic demand and the pace of recovery in 2021. Moody's also estimated the real GDP in the global economy to contract by 0.5% in 2020, followed by a pickup to 3.2% in 2021.
