Economy News June 2021 – Here we cover the most important Economy News June 2021. We cover all the important Economy News from June month.
We update the Economy News June 2021 article daily and the latest news appears at first. Our news sources are The Hindu, AIR, DD News, PIB, Indian Express, Business Line, and reputed and genuine sites.
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- OECD estimate growth cut of India to 9.9% FY22
- SBI Economists Revises GDP Growth Estimate forFY22 to 7.9%
- Moody’s Projects Indian Economy to grow 9.3% in FY22
- RBI Governor Addressed On RBI Monetary Policy 2021
- World Bank projects India to grow at 8.3% in 2021
- Crisil Projects India’s GDP Growth for FY22 to 9.5%
- ICRA projects GDP growth of India at 8.5% in FY 2022
- India ties with Russia as 4th largest forex reserves holder
- India’s retail inflation touches 6.3% in May
- Wholesale inflation hits record high of 12.94% in May
OECD estimate growth cut of India to 9.9% FY22
The Organisation for Economic Co-operation and Development (OECD) has cut India’s growth projection from 12.6% to 9.9 % for Financial Year 2022. This has done due to the rising cases of Covid cases and lockdowns which have threatend to shall the nascent economic rocovery of India.
As per OECD, “pandemic can be contained quickly but GDP (gross domestic product) growth will still be about 10% in 2021-22 and 8% in 2022-23.
OECD Headquarters: Paris, France, OECD Founded: 30 September 1961
SBI Economists Revises GDP Growth Estimate forFY22 to 7.9%
SBI economists has revised its report “Ecowrap”, according to the new report the GDP growth estimates for the Indian economy to 7.9 per cent in FY22, earlier it was 10.4 per cent. SBI economists growth rate estimation is the lowest growth rate estimate for India among all analysts.
The revision in growth estimation is the impact of the rising cases on COVID-19 cases. The SBI economists project a “W-shaped” recovery in FY22, with two troughs, instead of the earlier anticipated “V-shaped” recovery.
SBI Chairperson: Dinesh Kumar Khara, SBI Headquarters: Mumbai, SBI Founded: 1 July 1955
Moody’s Projects Indian Economy to grow 9.3% in FY22
According to Moody, India’s economy will rebound in the current financial year to mark a growth of 9.3% but the rising cases of coronavirus in the second Covid-19 wave have increased risks to the country’s outlook with potential longer-term credit implications.
Moody’s Investors Service has projected the GDP growth rate of the Indian economy as follows: 2021-22 (FY22): 9.3%; 2022-23 (FY23): 7.9%. But now in terms of Sovereign ratings, Moody’s has estimated a ‘Baa3’ rating on India with a negative outlook.
”India’s economy rebounded quickly from a steep contraction in 2020, but a severe second wave of the coronavirus has increased risks to the outlook with potential longer-term credit implications. Risks to India’s credit profile, including a persistent slowdown in growth, weak government finances, and rising financial sector risks, have been exacerbated by the shock,” Moody’s said.
RBI Governor Addressed On RBI Monetary Policy 2021
The six-member monetary policy committee of the Reserve Bank of India (RBI) headed by Governor Shaktikanta Das, has decided to keep key lending rates unchanged. This happens for the sixth consecutive time that the rates are unchanged. The review meeting held between June 2 to 4, 2021.
The RBI’s Monetary Policy Committee (MPC) has decided to continue with an accommodative stance until necessary to mitigate the impact of COVID-19. The next meeting of the MPC is scheduled from August 4 to 6, 2021.
Current policy rates are:
- Policy Repo Rate: 4.00%
- Reverse Repo Rate: 3.35%
- Marginal Standing Facility Rate: 4.25%
- Bank Rate: 4.25%
- CRR: 4%
- SLR: 18.00%
RBI Monetary Policy Highlights:
- The RBI downgraded the GDP growth forecast for FY22 to 9.5% compared with 10.5% earlier.
- On the other hand, growth is a bigger concern. The Gross Domestic Product (GDP) contracted 7.3% in FY21.
- Recently, SBI economists had sharply cut their FY22 GDP growth estimates to 7.9% from 10.4% earlier.
- The Reserve Bank of India Governor Shaktikanta Das announced a projection for Consumer Price Index (CPI) inflation at 5.1% for FY 2021-22.
- G-SAP 2.0 worth ₹1.2 lakh crore will be taken in the second quarter of FY22 to support the market.
- The rupee snapped its three-day losing streak and closed 18 paise higher at 72.91 against the US dollar.
World Bank projects India to grow at 8.3% in 2021
According to the World Bank projection, India’s economy will grow at 8.3% in 2021 and 7.5 per cent in 2022. The World Bank said, in 2023, India is expected to grow by 6.5%.
The World Bank’s released its Global Economic Prospect, in the report it noted that in India, an enormous second COVID-19 wave is undermining the sharper-than-expected rebound in activity seen during the second half of the Fiscal Year 2020/21, especially in services.
Crisil Projects India’s GDP Growth for FY22 to 9.5%
The domestic credit rating agency Crisil has lowered the GDP growth estimate for India for the financial year 2021-22 to 9.5%, from the earlier estimate of 11%. As per CRISIL, the economy had contracted by 7.3% in FY21.
The downward revision reflects the major hit of the two engines of growth, private consumption, and investment. This happens due to the rising cases in the second Covid-19 wave.
ICRA projects GDP growth of India at 8.5% in FY 2022
The domestic credit rating agency ICRA has projected the gross domestic product (GDP) growth rate of India for the financial year 2021-22 to 8.5% year-on-year.
It expects the gross value added (GVA) at basic prices (at constant 2011-12 prices) to grow at 7.3% in FY2022. ICRA is Gurgaon based credit rating agency, owned by Moody’s Corporation.
India ties with Russia as 4th largest forex reserves holder
As per Reserve Bank of India’s data, the foreign exchange reserves of India has crossed $600 billion marks for the first time.
The Forex reserve of India increased by USD 6.842 billion to $605.008 billion in the week ended June 04, 2021.
This is the lifetime high of India’s foreign asset. With this, India has tied with Russia as the fourth largest reserve holder in the world. The forex reserve of Russia is calculated to be $605.2 billion.
India’s retail inflation touches 6.3% in May
India’s retail inflation shot up to a six-month high of 6.3% in May, after easing to a three-month low of 4.23% in April. Inflation, based on Consumer Price Index (CPI), has breached the Reserve Bank of India’s (RBI) target range for the first time after five months.
The RBI is mandated to maintain the crucial number at 4% in the medium term, with a 2% point margin on either side as part of its inflation target.
National Statistical Office (NSO) data for retail inflation showed food inflation shot up to 5% in May from 2% in April as prices of protein items such as meat, fish, eggs, oils and fats accelerated.
The fuel bill also went up 11.6% as the government increased retail prices of petrol and diesel after state election results on 2 May. Services inflation jumped as costs of health, transport and personal care rose during the second wave of the pandemic.
Wholesale inflation hits record high of 12.94% in May
The wholesale price-based inflation accelerated to a record high of 12.94% in May, on rising prices of crude oil and manufactured goods. The low base effect also contributed to the spike in WPI inflation in May 2021.
In May 2020, WPI inflation was at -3.37%. In April 2021, WPI inflation hit double-digit at 10.49%.
The annual rate of inflation, based on monthly WPI, was 12.94% for the month of May 2021 (over May 2020) as compared to -3.37% in May 2020.
The Office of Economic Adviser, Department for Promotion of Industry and Internal Trade is releasing index numbers of Wholesale Price in India (Base Year: 2011-12) for the month of May 2021 (Provisional).