Monday, January 28, 2013

Lots of expectation


The world's second largest economy - China is steadily recovering from a near two-year cool-down. The economy grew 7.8% last year, its slowest annual pace of expansion in 13 years. Now China's economic growth forecast for 2013 has been lifted to 8.4% from 8.2%, with faster expansion seen in the first half of the year. The growth in China's factory sector accelerated to a two-year high in January, as manufacturers received more local and foreign orders. The Chinese Academy of Social Sciences predicts growth will ease slightly in the third quarter before picking up again in the October-December period.

The Reserve Bank of India (RBI) is widely expected to make a modest cut in interest rates to support an economy set for its slowest growth in a decade. According to RBI, high inflation and the widening current account deficit were the big constraints limiting the scope for monetary actions like an interest rate cut to boost growth. After growing at an alarming pace, India's headline inflation rose an annual 7.18% in December 2012, the slowest since December 2009. Despite constant calls for an interest rate cut from the industry to boost production, which contracted by 0.1% in November, the central bank has time and again stated that controlling inflation remains its key objective.

India's fiscal deficit touched `.413,000 crore in April-November. The government expects a budget deficit in the current fiscal year of 5.3% of GDP.

RSS4 grade rubber in India declined and closed at `.159.50 a kg and the price of RSS3 grade closed at `.176.38 per kg at Bangkok. On the Tokyo Commodity Exchange, February futures series currently trades at ¥313.3 per kg and is expected to cross ¥315 per kg mark on Tuesday.

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