<h2>Powell Signals No Urgency for Rate Cuts in Robust Economy</h2>U.S. Federal Reserve Chair Jerome Powell recently emphasized that there is no immediate need to accelerate interest rate cuts due to the economy’s steady growth, low unemployment, and inflation that remains above the Fed's 2% target. Speaking at a Dallas Fed event, Powell underscored the importance of a gradual approach in adjusting rates, allowing the Fed to maintain stability without prematurely stimulating or restraining growth.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;<h3>Inflation on Track, But Patience Required</h3>Powell stated that inflation is progressing toward the Fed's 2% target, a level viewed as sustainable for the economy’s long-term health. The Fed aims to guide inflation along a "sustainable path," which will ultimately allow monetary policy to shift toward a neutral stance — one that neither stimulates nor cools down economic activity excessively. Powell’s message: patience is essential, as a rushed approach could disrupt steady progress.<h3>Economic Resilience Permits a Steady Approach</h3>With the economy showing no signs of distress, Powell argued, the Fed has room to proceed cautiously. "The economy is not sending any signals that we need to be in a hurry to lower rates," he said. This resilience, marked by solid job growth and robust consumer spending, gives policymakers the flexibility to make rate adjustments based on incoming data, rather than urgency.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Educatio</a>n<h3>Market Reaction and Projections for Future Rates</h3>Following Powell’s remarks, yields on short-term U.S. Treasury bonds rose, with investors recalibrating expectations for future rate cuts. Currently, the Fed’s target rate is set at a range of 4.5% to 4.75%, but initial projections of the rate falling to 2.9% by 2026 are now seen as optimistic. Investors now anticipate a rate closer to 3.9% over the next few years, reflecting expectations of sustained economic growth.<h3>Gradual Path Forward</h3>As December’s Federal Reserve meeting approaches, traders expect a potential 0.25% rate cut. However, Powell’s cautious tone suggests that future adjustments will depend on how the economy performs in the coming months. This approach aligns with the Fed’s goal of avoiding abrupt shifts that could introduce financial instability.In sum, Powell’s data-driven, gradualist stance reaffirms the Fed’s commitment to steady economic growth while managing inflation. This approach supports confidence in the central bank’s ability to navigate complex economic landscapes without compromising stability.&nbsp;Also Read: <a href="https://www.sovrenn.com/knowledge/india-s-q3-merchandise-exports-expected-to-reach-107-5-billion-amid-modest-recovery">India’s Q3 Merchandise Exports Expected to Reach $107.5 Billion Amid Modest Recovery</a>

U.S. Federal Reserve Chair Jerome Powell recently emphasized that there is no immediate need to accelerate interest rate cuts due to the economy’s steady growth, low unemployment, and inflation that remains above the Fed's 2% target. Speaking at a Dallas Fed event, Powell underscored the importance of a gradual approach in adjusting rates, allowing the Fed to maintain stability without prematurely stimulating or restraining growth.

Fed Chair Powell Stresses Caution on Rate Cuts Amid Economic Strength

Modest Growth in Export Sector Despite Global PressuresIndia Exim Bank projects a 1.85% year-on-year increase in merchandise exports to $107.5 billion for Q3 FY25 (October-December), a rise from $104.61 billion in the same period last year. While the modest rebound underscores steady demand from key trade partners, potential global monetary easing could further support India’s export environment amid ongoing global economic uncertainty. Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;Key External Risks Persist in Global Trade EnvironmentExim Bank highlights several risks, including geopolitical tensions in the Middle East, economic fragmentation, protectionist trade policies, and continued supply chain issues. These external factors may pose headwinds to the projected export growth, creating a cautious outlook for Indian exporters in the near term.Positive Growth for Non-Oil, Non-Gemstone ExportsIndia Exim Bank forecasts a 7.39% increase in non-oil exports, expected to reach $91.7 billion. Non-oil, non-gems, and jewellery exports are anticipated to grow 7.8% to $82.7 billion year-on-year. These segments provide a stable base, supporting India’s trade amid fluctuating demand in commodity-based exports.Trade Deficit Declines, But Momentum Remains FragileIndia’s trade deficit narrowed to $20.78 billion in September, its lowest level in five months, buoyed by modest export growth and a decline in imports. This deficit has fluctuated between $19.1 billion and $29.65 billion over the past six months, signaling a fragile balance that may be influenced by shifting demand and global supply chain stability.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Educatio</a>nModest Growth Across Quarters Reflects Stable Yet Limited ExpansionIndia’s exports reached $109.11 billion in Q1 FY25 and $102.34 billion in Q2, marking slight changes from the prior fiscal year. Exim Bank’s quarterly forecasts, using the Export Leading Index model, anticipate moderate momentum into Q4, with the next projection update expected in early February.ConclusionIndia’s gradual export recovery underscores the resilience of certain sectors amid global complexities. Yet, ensuring consistent growth will require adaptive strategies to counter both external shocks and internal economic challenges. As India moves into the final quarter of FY25, export stability will depend on proactive trade policies and a close alignment with evolving global trends.Also Read:<a href="https://www.sovrenn.com/knowledge/inflation-squeezes-indian-households-as-cpi-hits-5-81-in-october"> Inflation Squeezes Indian Households as CPI Hits 5.81% in October</a>

India Exim Bank projects a 1.85% year-on-year increase in merchandise exports to $107.5 billion for Q3 FY25 (October-December), a rise from $104.61 billion in the same period last year. While the modest rebound underscores steady demand from key trade partners, potential global monetary easing could further support India’s export environment amid ongoing global economic uncertainty.

India’s Q3 Merchandise Exports Expected to Reach $107.5 Billion Amid Modest Recovery

Surge in Consumer Inflation Hits 14-Month HighIndia’s consumer price inflation (CPI) rose to 5.81% in October, marking a 14-month high. The rise was mainly fueled by soaring prices of food items such as tomatoes and edible oils. This inflation spike is close to the Reserve Bank of India’s (RBI) 6% tolerance ceiling, placing additional pressure on already stretched household budgets.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;Rising Food Costs Drive Inflation SpikeFood inflation, accounting for nearly half of the CPI, significantly impacted the overall inflation rate. Tomato prices surged due to erratic weather, while a 20% increase in import taxes on edible oils further strained households. These food-related pressures suggest that inflation may persist in the near term, with economists expecting more price volatility ahead.Rate Cut Unlikely as RBI Holds Off EasingGiven inflation’s proximity to the upper limit of RBI’s target range, economists believe a rate cut is unlikely until early next year. Suvodeep Rakshit of Kotak Institutional Equities commented, “If you look at RBI's forecast of growth, there is very little reason why support to growth is needed,” emphasizing a conservative approach to monetary policy.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Educatio</a>Core Inflation Stays Elevated Amid Festive DemandCore inflation, excluding food and energy prices, was estimated at 3.60% in October. Festive demand and rising gold prices kept core inflation elevated, suggesting steady price pressures even beyond food. Economist Dipanwita Mazumdar noted, “Core would also be on the upside due to frontloading of festive demand.”Outlook: Inflationary Pressures to PersistMultiple factors, including climate risks affecting crops, rupee depreciation, and global uncertainties, could keep inflation elevated. With inflation above RBI’s 4% target until at least 2026, economic stability faces a growing challenge. Rate cuts may remain on hold as the RBI balances inflation control with sustaining growth.Conclusion: Households Brace for Higher CostsWith inflationary risks persisting, Indian households face a prolonged period of elevated prices, particularly for essentials. The rising cost of living highlights the need for caution in economic policy as inflation continues to pressure consumers and businesses alike.Also Read:<a href="https://www.sovrenn.com/knowledge/fed-cuts-rates-to-4-5-as-trump-secures-presidency">Fed Cuts Rates to 4.5% as Trump Secures Presidency</a>

India’s consumer price inflation (CPI) rose to 5.81% in October, marking a 14-month high. The rise was mainly fueled by soaring prices of food items such as tomatoes and edible oils. This inflation spike is close to the Reserve Bank of India’s (RBI) 6% tolerance ceiling, placing additional pressure on already stretched household budgets.

Inflation Squeezes Indian Households as CPI Hits 5.81% in October

IntroductionThe US Federal Reserve cut its benchmark rate by 0.25%, bringing it to a target range of 4.50%-4.75% following a two-day Federal Open Market Committee (FOMC) meeting. This decision, the seventh policy shift in 2024, reflects the Fed's commitment to supporting economic stability amid cooling inflation and robust growth.&nbsp;Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;1. Fed Lowers Rates Post-Election, Ignoring Political PressuresDespite potential concerns about the implications of Donald Trump’s presidential victory, the Fed moved forward with a quarter-point rate cut. Chair Jerome Powell confirmed that political changes wouldn’t impact monetary policy in the immediate term, stating, “We don’t guess, we don’t speculate, and we don’t assume.” This cut is expected to ease costs for consumer loans, like mortgages, while broader economic factors will shape the long-term impact.2. Powell Pledges Stability Amid Presidential CriticismFed Chair Jerome Powell assured the public he would complete his term until 2026, even amid prior critiques from Trump’s campaign. Powell emphasized the Fed’s independence, noting that governors cannot be removed by the president without cause. This stance is critical in preserving the Fed’s credibility and autonomy, as Trump has expressed interest in influencing rate policies directly.3. Gradual Rate Cuts Expected as Fed Watches Economic SignalsPowell indicated confidence in the economy but emphasized a cautious approach to further cuts. While the Fed’s baseline is to ease rates gradually toward a “neutral” level, future adjustments will depend on economic data. “We’re trying to find neutral carefully, patiently,” Powell stated, underscoring a balanced strategy to sustain growth without triggering inflation.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Education</a>4. Fed Moderates Balance-Sheet Runoff PaceThe Fed plans to slow its balance-sheet reduction, decreasing monthly Treasury securities runoff to $25 billion from $60 billion starting June 2024. This adjustment is intended to maintain liquidity and support financial conditions, reflecting the Fed’s intention to stabilize markets without excessive intervention.5. Wall Street Rallies to New Highs Post-Fed DecisionWall Street responded strongly to the Fed’s rate cut, with the S&amp;P 500 and Nasdaq reaching record highs. Led by gains in tech stocks, the Nasdaq climbed 1.5% to 19,269.46, while the S&amp;P 500 rose 0.7% to 5,973.10.&nbsp;The Fed’s second consecutive rate cut illustrates a careful approach to maintaining economic momentum while addressing inflation, balancing market reactions with the need for policy stability amid a new political landscape.Also Read:<a href="https://www.sovrenn.com/knowledge/monsoon-rainfall-cools-diesel-demand-slowing-excise-collection-growth">Monsoon Rainfall Cools Diesel Demand, Slowing Excise Collection Growth</a>

The US Federal Reserve cut its benchmark rate by 0.25%, bringing it to a target range of 4.50%-4.75% following a two-day Federal Open Market Committee (FOMC) meeting. This decision, the seventh policy shift in 2024, reflects the Fed's commitment to supporting economic stability amid cooling inflation and robust growth. 

Fed Cuts Rates to 4.5% as Trump Secures Presidency

Diesel Demand and Excise Collections: Slower Than Expected GrowthThe Indian government’s excise duty collections grew moderately in the first half of this fiscal year, reaching ₹1.28 trillion from April to September. Although up 2.9% year-over-year, collections fell short of the targeted 5% annual growth, with diesel demand dampened by heavy monsoon rains. Data from the Controller General of Accounts (CGA) shows that while overall tax revenue rose 12%, excise on diesel underperformed due to reduced demand.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;How Diesel Excise Duty Works and Why Volume MattersExcise duties on fuels like diesel and petrol are levied per litre, not as a percentage of price. Therefore, the government’s revenue depends on the quantity consumed. Crude oil produced domestically is also subject to a specific rate excise duty, with certain older oil fields attracting an additional cess.Monsoon's Impact on Diesel ConsumptionThis year’s heavy monsoon delayed construction projects, curbing the need for diesel-powered logistics and transport. According to D.K. Srivastava, Chief Policy Advisor at EY, “Monsoons delay building activity, dampening diesel demand.” The Ministry of Finance’s monthly report for September noted that monsoon rains slowed mining and construction but bolstered agricultural activity. However, this did not significantly lift diesel consumption, as the need for diesel-powered irrigation was lower.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Education</a>Windfall Tax Partially Offsets Diesel Revenue DeclineAdditional support for excise revenue came from the windfall tax on domestic crude production. This tax, levied as a special excise duty, remained higher than last year’s rate until mid-August, before slightly declining. While this revenue helped offset reduced diesel excise, it wasn’t enough to fully counterbalance weak diesel demand.Fiscal Position: Deficit Within TargetDespite challenges with diesel excise growth, the Centre’s fiscal deficit remains manageable, aligned with the annual target of 4.9% of GDP, or ₹16.1 trillion. However, changing consumer habits and seasonal trends could continue to affect fuel tax collections, prompting a need for careful fiscal planning.ConclusionHeavy monsoons and a gradual shift in consumer preferences are slowing diesel demand and impacting the Centre’s excise revenue targets. As the government adapts to these changes, monitoring seasonal impacts and emerging vehicle trends will be critical for meeting revenue goals.Also Read: <a href="https://www.sovrenn.com/knowledge/india-s-service-sector-pmi-surges-in-october-a-strong-rebound-amid-cost-pressures">India’s Service Sector PMI Surges in October: A Strong Rebound Amid Cost Pressures&nbsp;</a>

The Indian government’s excise duty collections grew moderately in the first half of this fiscal year, reaching ₹1.28 trillion from April to September. Although up 2.9% year-over-year, collections fell short of the targeted 5% annual growth, with diesel demand dampened by heavy monsoon rains. Data from the Controller General of Accounts (CGA) shows that while overall tax revenue rose 12%, excise on diesel underperformed due to reduced demand.

Monsoon Rainfall Cools Diesel Demand, Slowing Excise Collection Growth

Manufacturing PMI Surges with October GainsIndia's manufacturing activity bounced back in October, with the HSBC India Manufacturing Purchasing Managers Index (PMI) rising to 57.5, up from September’s 56.5. This marks a positive shift following an eight-month low, with the PMI maintaining its position above the expansion threshold of 50 for almost three consecutive years.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;Strong Demand Spurs New Orders and Export GrowthDomestic and international demand drove new orders, helping to reverse September’s slowdown. Export orders, in particular, showed recovery, with increased demand from markets across Asia, Europe, Latin America, and the US. Pranjul Bhandari, Chief India Economist at HSBC, observed, "India’s manufacturing PMI picked up in October as rapidly expanding new orders reflect strong demand growth."Inflationary Pressures Continue to ClimbManufacturers faced rising costs in materials, labor, and logistics, leading to increased input and selling prices. Persistent inflation impacted business expenses, yet resilient demand allowed firms to balance higher costs with steady output growth.Positive Growth Forecasts Boost ConfidenceThe Reserve Bank of India (RBI) recently raised its FY25 GDP growth forecast from 7% to 7.2%, citing stronger rural and urban demand and favorable monsoon conditions. The festival season has also contributed to a surge in consumer confidence, further lifting sentiment across the manufacturing sector.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Education</a>Manufacturing as a Path to a $10 Trillion EconomyIndia’s ambitious goal of transforming into a $10 trillion economy within the next decade is closely tied to manufacturing growth in sectors like semiconductors, electronics, electric vehicles, renewable energy, and defense. Increased government spending on infrastructure has bolstered this growth, with Indian suppliers improving their capacity to meet rising demand comfortably.The sustained expansion in manufacturing and supplier performance underscores India’s potential to meet its economic targets, driven by robust domestic demand and growing export competitiveness.Also Read: <a href="https://www.sovrenn.com/knowledge/china-s-countermeasures-in-place-as-trump-threatens-60-tariffs">China’s Countermeasures in Place as Trump Threatens 60% Tariffs&nbsp;</a>

India's manufacturing activity bounced back in October, with the HSBC India Manufacturing Purchasing Managers Index (PMI) rising to 57.5, up from September’s 56.5. This marks a positive shift following an eight-month low, with the PMI maintaining its position above the expansion threshold of 50 for almost three consecutive years.

India’s Manufacturing Rebounds in October Amid Rising Demand and New Orders

IntroductionIndia’s services sector witnessed a notable rebound in October, driven by robust customer demand, as per the latest survey data. The Service PMI, a critical economic indicator, showed sustained expansion, marking 39 consecutive months above the 50-point mark, which signals growth. Let’s delve into what these findings reveal about the health and momentum of India’s economy.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;Strong Demand Fuels Service Sector ExpansionThe HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&amp;P Global, rose to 58.5 in October, up from 57.7 in September. After a slight dip, the October surge reflects renewed demand across both domestic and international markets. Responses from over 400 service firms highlight a significant uptick in business activity, driven by customer interest and robust sales pipelines.Employment Boost: Fastest Hiring in Over Two YearsThe October PMI data also showcased the strongest job creation in 26 months as companies hired to keep up with surging demand. The hiring boost underscores the optimism within the service sector, where demand remains elevated despite economic uncertainties. “Strong expansions in output and consumer demand led to a substantial increase in employment within the services sector,” said Pranjul Bhandari, Chief India Economist at HSBC.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Education</a>Services Sector: The Cornerstone of India’s GDP GrowthIndia’s services sector plays a pivotal role in the economy, contributing over 50% to the national GDP. The country’s economy recorded an 8.2% growth rate in the 2023-24 fiscal year, outpacing the Reserve Bank of India’s (RBI) 7% forecast. However, GDP growth moderated to 6.7% in the April-June quarter, reflecting global headwinds and domestic cost pressures. Despite this, the robust performance in October suggests the sector is regaining momentum and supporting broader economic stability.Resurgence in Manufacturing ActivityIndia’s manufacturing sector also picked up speed in October. The HSBC India Manufacturing PMI increased to 57.5, up from September’s 56.5, highlighting strong new orders and export demand. This rise breaks from September’s eight-month low, signaling renewed vigor across the manufacturing landscape. Together, these trends reflect a broadly positive economic outlook as both service and manufacturing sectors post gains.Conclusion: Strong Foundation Amid Inflationary ChallengesIndia’s service sector has shown impressive resilience, reflecting the strength of domestic demand even as input costs rise. With high levels of consumer interest, expanding employment, and a positive outlook for both services and manufacturing, India’s economy appears well-positioned to weather the global headwinds. Businesses’ ability to navigate cost pressures and maintain growth suggests a stable trajectory in the months ahead, lending confidence to India’s economic forecast as the fiscal year progresses.&nbsp;Also Read: <a href="https://www.sovrenn.com/knowledge/india-s-fiscal-discipline-and-core-sector-resurgence-h1-fy-25-highlights">India’s Fiscal Discipline and Core Sector Resurgence: H1 FY25 Highlights</a>

India’s services sector witnessed a notable rebound in October, driven by robust customer demand, as per the latest survey data. The Service PMI, a critical economic indicator, showed sustained expansion, marking 39 consecutive months above the 50-point mark, which signals growth. Let’s delve into what these findings reveal about the health and momentum of India’s economy.

India’s Service Sector PMI Surges in October: A Strong Rebound Amid Cost Pressures

IntroductionWhen Donald Trump began a trade war with China in 2018, Beijing faced a steep learning curve. Today, President Xi Jinping is prepared for a new confrontation as Trump threatens a 60% tariff on Chinese goods. Over recent years, China has built a toolkit to buffer its economy and counter external threats. Key strategies include export controls on essential materials, tariffs on U.S. agricultural products, and a robust “entity list” to target American companies.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;Strengthening Economic ResilienceIn response to past U.S. tariffs, China has fortified its economy, diversifying import sources and promoting domestic industries. For example, exporting electric vehicles and batteries has helped offset economic pressures, and lawmakers are now considering additional measures to stimulate growth if Trump’s threats materialize.&nbsp;Currency and Market PressuresChina’s financial markets are already reacting to the possibility of a new trade war. This week, the offshore yuan dropped 1.3% against the dollar, and Chinese stocks faced declines, signalling volatility. Economists like Alicia Garcia Herrero at Natixis believe China will deploy a “bigger stimulus” to protect its economy from market penalties if Trump imposes the tariffs.Retaliation Ready, But LimitedWhile China is poised to retaliate, options are limited. Past measures included targeting U.S. agricultural goods—such as corn and soybeans—but the U.S.’s share in these imports has fallen, with countries like Brazil taking up the slack. Nonetheless, experts assert that China is “prepared to fight fire with fire” if necessary.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Education</a>Export Controls and U.S. DependenciesOne of China’s new tools is imposing export controls on critical raw materials, such as gallium and germanium, which are essential to chip manufacturing and defence industries. Beijing may consider further restrictions on materials like antimony, which is vital for American technologies.&nbsp;In sum, China’s strategy is clear: ready to retaliate, but cautiously optimistic about finding a path to mitigate economic damages. Yet, Beijing is bracing for the volatility ahead, underscoring its preparedness, but it recognizes that there is “no silver bullet” to avoid the potential fallout of Trump’s tariff threats.Also Read:<a href="https://www.sovrenn.com/knowledge/category/macro-economy">Swiss Companies Shift Focus from China to India</a>

When Donald Trump began a trade war with China in 2018, Beijing faced a steep learning curve. Today, President Xi Jinping is prepared for a new confrontation as Trump threatens a 60% tariff on Chinese goods. Over recent years, China has built a toolkit to buffer its economy and counter external threats. Key strategies include export controls on essential materials, tariffs on U.S. agricultural products, and a robust “entity list” to target American companies.

China’s Countermeasures in Place as Trump Threatens 60% Tariffs

Swiss giants such as&nbsp;ABB&nbsp;and&nbsp;Kuehne Nagel&nbsp;are ramping up investments in India as the two nations prepare to benefit from the&nbsp;$100 billion Trade and Economic Partnership Agreement (TEPA)&nbsp;with the&nbsp;European Free Trade Association (EFTA). The agreement, set to cut tariffs and create job opportunities, comes amid a strategic shift by businesses looking beyond China’s slowing economy and geopolitical risks.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;<h2>TEPA: A Game-Changer for Swiss-Indian Trade</h2>TEPA, signed in&nbsp;March 2024, is expected to reduce&nbsp;tariffs on 94.7% of Swiss exports&nbsp;to India, from chocolates to industrial machinery. Though the agreement is&nbsp;pending parliamentary approval&nbsp;and will likely take effect by&nbsp;2026, businesses are already optimistic about easier market access and&nbsp;competitive advantages&nbsp;over companies in the&nbsp;EU and UK.<h2>Why Swiss Firms Are Doubling Down on India</h2>ABB, a leader in industrial automation, has&nbsp;expanded its workforce from 6,000 to 10,000&nbsp;since 2020, driven by a&nbsp;27% annual rise in orders&nbsp;from India. “We are building for India, in India,” said ABB CEO&nbsp;Morten Wierod, underscoring the company’s&nbsp;commitment to local production.Meanwhile, logistics giant&nbsp;Kuehne Nagel&nbsp;has more than&nbsp;doubled its workforce to 4,800&nbsp;and opened new hubs in&nbsp;Chennai, Gurugram, and Kolkata. Managing Director&nbsp;Anish Jha&nbsp;praised India’s&nbsp;National Logistics Plan&nbsp;for lowering transportation costs, boosting growth, and supporting&nbsp;logistics infrastructure.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Education</a><h3>A New Investment Destination for Precision Engineering</h3>Even smaller companies are getting in on the action.&nbsp;Feintool, a precision components manufacturer, is building its&nbsp;first plant in Pune, which will employ 200 people and serve India’s growing automotive sector. In 2023, India accounted for&nbsp;1.5% of Swiss mechanical exports, but that share is rising—growing&nbsp;8% year-over-year. This trend reflects how companies are&nbsp;rebalancing their supply chains&nbsp;away from China, favoring India’s dynamic economy.Conclusion: India’s Red Carpet for Global InvestmentTEPA will provide Swiss companies with&nbsp;zero-tariff access&nbsp;and help generate&nbsp;1 million new jobs&nbsp;in India over the next&nbsp;15 years. As businesses shift operations from China, India is positioning itself as a&nbsp;global trade hub, offering&nbsp;local manufacturing incentives, infrastructure growth, and a booming market of&nbsp;1.4 billion consumers. The&nbsp;Swiss-India partnership&nbsp;signals a broader trend—one where India is quickly becoming a&nbsp;preferred destination&nbsp;for global firms eager to tap into new opportunities.&nbsp;Also Read<a href="https://www.sovrenn.com/knowledge/india-s-fiscal-discipline-and-core-sector-resurgence-h1-fy-25-highlights">: India’s Fiscal Discipline and Core Sector Resurgence: H1 FY25 Highlights</a>

Swiss giants ABB and Kuehne Nagel are increasing investments in India as part of the $100 billion Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association. This strategic move aims to cut tariffs, create job opportunities, and help businesses navigate the shifting economic landscape beyond China.

Swiss Companies Shift Focus from China to India

<h2>Fiscal Deficit Narrows as Revenue Collection Improves</h2>India's fiscal deficit for the first half (H1) of FY25 narrowed to ₹4.75 trillion, reaching just 29.4% of the annual target. This marks an improvement from ₹7.02 trillion in H1 FY24, primarily due to higher tax revenues, an unprecedented dividend from the Reserve Bank of India (RBI), and cautious capital expenditure amidst the general elections.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;<h2>Key Figures:</h2><ul><li>Net Tax Receipts: ₹12.65 trillion (49% of annual target) compared to ₹11.60 trillion in H1 FY24.</li><li>Government Expenditure: ₹21.11 trillion, or 43.8% of the annual budget, down slightly from ₹21.19 trillion in H1 FY24.</li><li>Capital Expenditure: ₹4.15 trillion, or 37.3% of the annual goal, showing a reduction from last year’s 49%.</li><li>Non-Tax Revenue: ₹3.57 trillion (65.5% of target), bolstered by a record RBI dividend.</li></ul>Aditi Nayar, chief economist at ICRA Ltd., commented, "The deficit reduction is encouraging, but meeting FY25 capex goals remains ambitious, with monthly spending needing to reach ₹1.16 trillion in the second half."<h2>RBI Dividend Bolsters Fiscal Stability</h2>The RBI’s ₹2.11 trillion dividend, a 141% year-over-year increase, has given critical support to the government’s fiscal agenda. This substantial contribution strengthens India’s ability to meet its ambitious FY25 deficit target of 4.9% of GDP, down from last year’s 5.6%. This payout will help mitigate risks of revenue shortfalls or cuts in spending.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Education</a><h2>Core Sector Rebounds in September</h2>India’s core sector output showed a modest recovery in September, with a 2% annual growth following a 1.6% contraction in August. Five of the eight core industries—coal, steel, cement, fertilizers, and refinery products—recorded positive growth, signaling renewed momentum for nearly 40% of the industrial economy.<h3>Sector Highlights:</h3><ul><li>Coal: Production rose by 2.6% after August’s 8.1% drop.</li><li>Steel: Increased by 1.5%, though down from August’s 3.9%.</li><li>Cement: Rebounded with a 7.1% rise after a prior decline.</li><li>Electricity: Output fell by 0.5%, extending its previous contraction.</li></ul>In summary, India’s fiscal discipline is evident, though sustaining growth in industrial output and meeting capex targets will be crucial for maintaining momentum. With careful balancing of fiscal goals and industrial policies, India’s economic growth remains on a cautious but optimistic trajectory for FY25.Also Read:<a href="https://www.sovrenn.com/knowledge/india-s-economic-growth-is-on-track-but-job-creation-remains-a-challenge"> India’s Economic Growth is on Track, but Job Creation Remains a Challenge</a>&nbsp;

India's fiscal deficit for the first half of FY25 decreased to ₹4.75 trillion, representing 29.4% of the annual target, a notable improvement from ₹7.02 trillion in H1 FY24. This positive trend is driven by increased tax revenues, a record dividend from the Reserve Bank of India (RBI), and prudent capital expenditure ahead of the general elections.

India’s Fiscal Discipline and Core Sector Resurgence: H1 FY25 Highlights

India’s economy is expected to grow steadily, but concerns about job creation and weak household consumption may limit its long-term potential. A recent Reuters poll of 48 economists conducted between October 21-28 indicates that while growth will stay robust, employment generation and spending remain key challenges.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;<h2>Steady Economic Growth</h2>India’s GDP is forecasted to grow by 6.9% in FY 2024-25, marginally below the IMF’s estimate of 7%, and further slow to 6.7% in FY 2025-26 and 6.6% by FY 2026-27. While last year’s 8.2% growth reflected strong government spending, economists stress that growth must exceed 8% over several years to generate sufficient jobs for millions entering the workforce annually.<h2>Job Creation: Limited Progress</h2>According to the poll, 15 out of 28 respondents expect only a mild improvement in job creation, while 9 believe it will remain unchanged. Kunal Kundu, India economist at Societe Generale, highlighted that struggling MSMEs and negative real wage growth are key factors holding back employment. Public-sector jobs remain scarce, and private investment has stagnated for the past decade.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Education</a><h2>Consumer Spending: Recovery Faces Headwinds</h2>Household consumption, which contributes 60% to GDP, has picked up slightly but is likely to moderate in the coming months. Rising inflation is forcing households to cut back on essentials and dip into savings. 19 out of 28 economists expect only a mild increase in private consumption over the next year<h2>Structural Reforms Needed for Sustainable Growth</h2>The lack of private investment hinders employment creation and broader economic recovery. Economists urge policymakers to introduce structural reforms and support key sectors like MSMEs to unlock investment and generate jobs. Without such changes, growth will remain uneven, benefiting only select industries, and limiting progress toward inclusive economic development.ConclusionIndia’s economic outlook remains positive, but sustained growth requires more than just high GDP numbers. Policymakers must focus on job creation, wage improvements, and private investment to ensure that the growth trajectory translates into broad-based prosperity. Household spending and employment are critical levers for long-term stability, and without addressing these issues, economic momentum may weaken in the years ahead.&nbsp;Also Read:<a href="https://www.sovrenn.com/knowledge/rbi-s-growth-estimates-optimism-or-overreach"> RBI’s Growth Estimates: Optimism or Overreach?</a>

India's economy is poised for steady growth, but job creation and weak household consumption pose significant challenges for long-term potential. A recent Reuters poll of 48 economists highlights robust growth projections while emphasizing the critical need to address employment generation and consumer spending concerns.

India’s Economic Growth is on Track, but Job Creation Remains a Challenge

The Reserve Bank of India (RBI) has projected&nbsp;7.2% GDP growth&nbsp;for FY 2024-25, outpacing government estimates of&nbsp;6.5-7%&nbsp;and forecasts by Goldman Sachs, which expects growth to fall to&nbsp;6.5%. This optimistic outlook has raised questions among economists, especially given recent signs of slowing economic activity.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;<h3>Mixed Signals: Rural Gains, Urban Weakness</h3>The RBI’s confidence stems from improving&nbsp;rural spending&nbsp;and&nbsp;private investments, but weak&nbsp;urban consumptionand&nbsp;declining exports&nbsp;present challenges. Recent data suggests:<ul><li>Passenger vehicle sales&nbsp;declined for two consecutive months.</li><li>Air travel&nbsp;fell in three of the last four months.</li><li>Factory activity&nbsp;softened since July, with only a slight recovery recently.</li></ul>The consumer goods sector is also under pressure.&nbsp;Hindustan Unilever Ltd.&nbsp;reported falling profits, with its CEO noting, “Urban growth has trended down in recent quarters.”<h3>Interest Rates: Tight Policy Risks</h3>The RBI has held interest rates unchanged for nearly two years. Governor&nbsp;Shaktikanta Das&nbsp;warned against rate cuts, calling them “very, very risky.” However, some economists believe that delaying rate cuts could hinder growth. “Keeping rates higher for too long risks a policy misstep,” cautioned&nbsp;Teresa John&nbsp;of Nirmal Bang Institutional Equities, highlighting the&nbsp;lagged impact&nbsp;of monetary policy on economic recovery.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Education</a><h3>Festival Sales: A Temporary Boost?</h3>The RBI is banking on the&nbsp;festival season&nbsp;to revive demand, but economists warn that any boost might be&nbsp;short-lived. “There is hope that Diwali will be lit, but the light may not last several quarters,” said&nbsp;Achala Jethmalani&nbsp;from RBL Bank.<h3>Rural Recovery: A Limited Impact</h3>Rural markets are benefiting from&nbsp;above-normal monsoons&nbsp;and&nbsp;bumper crops, but the rebound remains insufficient to compensate for sluggish urban demand.&nbsp;Sunil D’Souza&nbsp;of Tata Consumer Products noted, “Rural is recovering but not enough for double-digit volume growth.”`Conclusion: Growth or Wishful Thinking?The RBI’s optimistic forecast has sparked concern, with economists warning that&nbsp;overlooking economic red flags&nbsp;could result in misguided monetary policy. As the central bank weighs&nbsp;growth and stability, the coming months will test whether rural gains and festival sales can sustain economic momentum or if&nbsp;the optimism proves premature.Also Read: <a href="https://www.sovrenn.com/knowledge/india-s-oil-demand-set-to-surge-amid-festivals-and-rabi-season">India’s Oil Demand Set to Surge Amid Festivals and Rabi Season</a> &nbsp;

Explore the Reserve Bank of India's growth estimates and the debate surrounding their realism. Are these projections a sign of optimism for India's economy, or do they represent an overreach? Delve into the implications of these forecasts on economic policy and future growth.

RBI’s Growth Estimates: Optimism or Overreach?

India’s oil consumption is expected to rise by nearly 4% year-on-year (YoY) in Q4 2024, driven by festive demand, the rabi sowing season, and elections. However, weather disruptions and softening crude prices may challenge the profitability of oil marketing companies (OMCs) in FY 2024-25.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;<h2>Festivals, Weddings, and Elections Drive Demand</h2>According to S&amp;P Global Commodity Insights, India’s oil demand will grow by 50,000-55,000 barrels per day (b/d)in Q4 2024, led by gasoline and diesel consumption. The festive season boosts travel, retail spending, and vehicle purchases, while the wedding season (November–January) further increases automobile usage and goods movement. Upcoming state elections in Maharashtra and Jharkhand are also expected to push transportation fuel demand higher.<h3>Rains Impact September Fuel Demand</h3>Unusually heavy rains disrupted road transport, construction, and mining activities, leading to a 2% YoY decline in diesel consumption in September 2024. Gasoline consumption rose 3% YoY, though sequentially it declined. “The northeast monsoon may dampen fuel demand temporarily, but the rabi season and festivals will drive recovery,” said Himi Srivastava, South Asia oil analyst at S&amp;P Global.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Education</a><h3>OMCs Face Profitability Challenges from Lower Crude Prices</h3>Crisil Ratings expects OMCs to see shrinking margins as crude prices fall to $75 per barrel in H2 FY 2024-25 from $82 per barrel in H1. With the tapering of Russian crude discounts, OMCs’ gross refining margins (GRMs) are projected to shrink to $12-14 per barrel, down from $20 per barrel last year. Inventory losses may further impact profits.<h3>Stable Retail Prices to Support Margins</h3>Retail fuel prices remain unchanged, helping OMCs maintain marketing margins of ₹4.5 per litre (~$9 per barrel). This stability will offset some of the pressures from declining refining margins. “Volatile crude prices will compress refining profits, but marketing margins will sustain overall returns,” said Aditya Jhaver, director at Crisil Ratings.ConclusionIndia’s oil demand will surge in Q4 2024, driven by festivals, weddings, and elections, but OMCs must navigate profit challenges amid falling crude prices and higher debt. With 80% of oil demand met via imports, stable fuel prices and marketing margins will remain essential in a volatile global environment.Also Read: <a href="https://www.sovrenn.com/knowledge/rbi-signals-flexibility-but-keeps-inflation-in-check">RBI Signals Flexibility but Keeps Inflation in Check</a>&nbsp;&nbsp;

India’s oil consumption is expected to rise by nearly 4% year-on-year (YoY) in Q4 2024, driven by festive demand, the rabi sowing season, and elections. However, weather disruptions and softening crude prices may challenge the profitability of oil marketing companies (OMCs) in FY 2024-25

India’s Oil Demand Set to Surge Amid Festivals and Rabi Season

Introduction: RBI Prioritizes Inflation Control At the latest Monetary Policy Committee (MPC) meeting, RBI Governor Shaktikanta Das stressed that&nbsp;India cannot afford another surge in inflation. He advocated for&nbsp;policy flexibility&nbsp;until inflation aligns with the central bank’s 4% target. The MPC voted&nbsp;5-1&nbsp;to maintain the&nbsp;benchmark repo rate at 6.5%&nbsp;for the tenth consecutive meeting, underscoring the RBI’s cautious approach amid global uncertainties.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;Balancing Growth and InflationDas emphasized that&nbsp;price stability is crucial for sustainable growth&nbsp;and suggested shifting the policy stance to&nbsp;neutralto provide room for future adjustments. He warned that risks like&nbsp;geopolitical tensions, commodity price fluctuations, and adverse weather&nbsp;could disrupt inflation trends, making it essential to stay vigilant.Diverging Views Among MPC MembersWhile most members supported holding rates,&nbsp;Nagesh Kumar&nbsp;proposed a&nbsp;25-basis-point rate cut&nbsp;to boost private investment amid weak industrial demand. New members&nbsp;Saugata Bhattacharya&nbsp;and&nbsp;Ram Singh&nbsp;agreed with maintaining the rate but favored a&nbsp;neutral stance&nbsp;for more policy flexibility.Global Factors to WatchRBI Executive Director&nbsp;Rajiv Ranjan&nbsp;highlighted key uncertainties—U.S. elections, Chinese policies, and geopolitical risks—that may provide clearer insights by December. Deputy Governor&nbsp;Michael Debabrata Patra&nbsp;stressed that easing should only be considered when inflation nears the target.Investing has built huge wealth for several HNI investors. Learn investing FREE OF CHARGE at&nbsp;<a href="https://www.sovrenn.com/education">Sovrenn Education</a>Conclusion: Inflation Control is the RBI’s PriorityDas made it clear that&nbsp;controlling inflation takes precedence&nbsp;over stimulating growth. The&nbsp;wait-and-watch approachreflects the RBI’s commitment to&nbsp;long-term economic stability, balancing inflation management with growth needs as uncertainties unfold.Also Read<a href="https://www.sovrenn.com/knowledge/imf-projects-india-s-fy-25-growth-at-7-highlights-resilience-amid-global-headwinds">: IMF Projects India’s FY25 Growth at 7%, Highlights Resilience Amid Global Headwinds</a>

At the latest Monetary Policy Committee (MPC) meeting, RBI Governor Shaktikanta Das stressed that India cannot afford another surge in inflation. He advocated for policy flexibility until inflation aligns with the central bank’s 4% target. The MPC voted 5-1 to maintain the benchmark repo rate at 6.5% for the tenth consecutive meeting, underscoring the RBI’s cautious approach amid global uncertainties.

RBI Signals Flexibility but Keeps Inflation in Check

The International Monetary Fund (IMF), in its October 2024 World Economic Outlook, maintained India’s growth forecast at 7% for FY25 and 6.5% for FY26, signaling sustained momentum in the face of global uncertainties. For FY24, India’s economy grew by 8.2%, driven by pent-up demand, which is expected to moderate moving forward.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;<h2>India Leads Emerging Markets with Strong Domestic Demand</h2>India’s domestic consumption and investment remain key drivers of growth, with the RBI projecting 7.2% growth for FY25. Similarly, the World Bank recently raised India’s FY24 forecast to 6.6%, citing strong economic momentum. NR Bhanumurthy from the Madras School of Economics remarked that India has the potential to grow at 9% annually, though risks like rising oil prices and global inflation could limit growth.<h3>Global Growth Steady But Uneven</h3>While the IMF kept its global growth forecast at 3.2% for 2024 and 2025, it noted mixed regional trends. Advanced economies, including the U.S., are projected to grow at 2.8% in 2024 and 2.2% in 2025, while China’s growth is expected to slow to 4.8% in 2024. In contrast, emerging markets, led by India and Russia, are forecast to grow at 4.2%, driven by robust demand for electronics and AI investments.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a><h3>Key Risks: Oil Prices, Inflation, and Geopolitical Tensions</h3>Despite the optimistic outlook, global inflation, volatile oil prices, and geopolitical tensions pose challenges. IMF’s Chief Economist, Pierre-Olivier Gourinchas, warned that conflicts in the Middle East and tighter financial conditions could disrupt growth across commodity markets, affecting economies like India.Outlook: Positioned for Long-Term GrowthIndia’s growth outlook remains robust due to strong domestic demand and opportunities from global AI investments. However, successfully navigating external risks will be crucial to maintaining its position as one of the world’s fastest-growing major economies.With stable economic fundamentals, India is well-positioned to thrive, but vigilance against external shocks will be key to sustaining this momentum in the coming years.Also Read:<a href="https://www.sovrenn.com/knowledge/fed-likely-to-hold-rates-in-november-as-us-economy-defies-recession-fears"> Fed Likely to Hold Rates in November as US Economy Defies Recession Fears</a>

The International Monetary Fund (IMF) has reaffirmed India’s growth forecast at 7% for FY25 and 6.5% for FY26 in its October 2024 World Economic Outlook, highlighting sustained economic momentum amid global uncertainties. Following an 8.2% growth in FY24, fueled by pent-up demand, a moderation in growth is anticipated in the coming years.

IMF Projects India’s FY25 Growth at 7%, Highlights Resilience Amid Global Headwinds

The Case for a Fed Pause in November The Federal Reserve is increasingly likely to leave interest rates unchanged at its November meeting, according to&nbsp;Torsten Slok, chief economist at Apollo Management. Despite inflation concerns, the US economy shows remarkable strength, raising the possibility that the Fed will adopt a more cautious stance for the remainder of 2024.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;Resilient Growth and Market TailwindsSlok attributes the economy’s momentum to several supportive factors. Elevated&nbsp;stock and home prices,&nbsp;narrow credit spreads, and ample&nbsp;corporate financing&nbsp;continue to bolster growth. The Atlanta Fed estimates&nbsp;Q3 GDP growth at 3.4%, reflecting strong economic performance and what Slok refers to as a “no landing” scenario—where expansion persists without a recession.Bond Market Reflects Growth ExpectationsThe bond market has responded with rising yields, driven by concerns over inflation and fiscal policy:<ul><li>2-year Treasury yield: Rose above 4%.</li><li>10-year yield: Climbed 9 basis points to 4.17%.</li><li>30-year yield: Approached 4.5%, impacted by option-related trades.</li></ul>The market’s reaction underscores investor concerns about inflation reigniting, despite economic growth.Policymakers Favor Caution Amid Strong DataPolicymakers like&nbsp;Dallas Fed President Lorie Logan&nbsp;have echoed the need for patience, suggesting that further rate hikes may not be necessary. The Fed’s&nbsp;September dot plot&nbsp;hinted at two possible rate cuts by year-end, but robust September employment data has shifted expectations toward a pause in November.Upcoming Data and Market UncertaintyWith the&nbsp;October jobs report&nbsp;due on November 1 and elections adding political uncertainty, the Fed faces a complex decision. Traders are currently pricing&nbsp;20 basis points of easing&nbsp;for November, signaling that markets expect the Fed to hold steady in at least one of its final two meetings.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>Conclusion: A Delicate Balancing Act for the FedThe US economy’s resilience suggests that the Fed may opt to maintain current rates in November, allowing more time to assess inflation trends. While fiscal risks linger, including the potential for&nbsp;5% yields on 10-year Treasuries, Slok believes&nbsp;locked-in low rates&nbsp;and government initiatives will continue to support growth. For now, the Fed’s best course may be caution as it monitors the evolving economic landscape.Also Read: <a href="https://www.sovrenn.com/knowledge/ecb-poised-for-surprise-rate-cut-amid-growth-concerns">RBI Repo Rate Cuts Likely Delayed to 2025 as Inflation Hits Nine-Month High</a>&nbsp;

The Federal Reserve is increasingly likely to leave interest rates unchanged at its November meeting, according to Torsten Slok, chief economist at Apollo Management. Despite inflation concerns, the US economy shows remarkable strength, raising the possibility that the Fed will adopt a more cautious stance for the remainder of 2024.

Fed Likely to Hold Rates in November as US Economy Defies Recession Fears

The European Central Bank (ECB) has reduced its key interest rate by 25 basis points to 3.25%, marking the third consecutive cut this year. This move reflects confidence that inflation is easing faster than anticipated, allowing policymakers to shift focus toward supporting the euro-zone economy, which has shown signs of stagnation.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;<h2>Inflation in Retreat: Room for Easing</h2><ul><li>Inflation fell to 1.7% in September, the lowest since 2021.</li><li>Services inflation remains elevated, hovering near 4%, suggesting persistent upward pressures.</li><li>The ECB expects to bring inflation under control by early 2025, advancing its earlier forecast of mid-2025.</li></ul>Markets anticipate continued rate cuts at each meeting through March 2025, with the deposit rate potentially settling around 2% by the end of next year.<h3>Sluggish Growth in Key Economies</h3>While Germany, the euro zone’s largest economy, struggles with weak exports to China, Spain, Portugal, and Greeceare helping the region avoid a recession through strong domestic demand. A trade spat between Brussels and Beijing could further weigh on the economy, adding to risks.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a><h3>Outlook: Cautious but Ready to Act</h3>Analysts expect gradual easing, with the ECB likely slowing the pace of cuts in 2025. However, if growth falters, back-to-back reductions could continue. The ECB aims to reach a neutral rate of 2%-2.5%, which neither stimulates nor restricts economic activity.<h3>Global Risks Add Complexity</h3>Geopolitical tensions, including Middle East hostilities and a possible shift in U.S. policy, remain key concerns for ECB officials. Additionally, policymakers are keeping an eye on the Federal Reserve, which has begun its own easing cycle, potentially influencing global markets.<h3>Market Response</h3>German 10-year bond yields rose slightly to 2.20% after the rate cut, while markets have fully priced in another quarter-point reduction by December. The ECB’s strategic shift aims to revive growth without reigniting inflation. As inflation cools and external risks loom, the bank will need to tread carefully to ensure a sustainable recovery.Also Read: <a href="https://www.sovrenn.com/knowledge/ecb-poised-for-surprise-rate-cut-amid-growth-concerns">RBI Repo Rate Cuts Likely Delayed to 2025 as Inflation Hits Nine-Month High</a>&nbsp;

The ECB cuts its key interest rate by 25 basis points to 3.25%, signaling confidence in easing inflation and shifting focus to support the euro-zone's slowing economy.

ECB Cuts Interest Rates to 3.25% Amid Slowing Inflation to Support Growth

InrtroductionIn a significant monetary policy adjustment, China has cut its benchmark lending rates by 25 basis points (bps) during the monthly fixing on October 21, 2024. This decision aligns with market expectations and reflects the government's commitment to stimulate the economy amidst ongoing challenges. The one-year Loan Prime Rate (LPR) now stands at 3.10%, down from 3.35%, while the five-year LPR has been reduced to 3.60% from 3.85%.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;Context of the Rate CutsThe reduction in the LPR is part of a broader strategy initiated by the People’s Bank of China (PBOC) to bolster economic activity. Following last month’s policy rate reductions, this cut is the latest in a series of aggressive measures aimed at addressing sluggish growth and reviving critical sectors, particularly real estate and consumer spending. The PBOC last adjusted both rates in July, and they are now positioned at historically low levels, providing an opportunity for both businesses and consumers to access cheaper financing.Implications for Borrowers and the EconomyThe one-year LPR is the reference rate for most new and outstanding loans in China, making it a crucial benchmark for businesses seeking credit. The five-year LPR plays a vital role in determining mortgage rates, impacting home buyers and the real estate market. With the latest cuts, the hope is to encourage lending and stimulate demand in a landscape characterized by cautious consumer sentiment and reduced investment activity.PBOC Governor Pan Gongsheng previously indicated the likelihood of rate reductions between 20 to 25 basis points, setting the stage for this anticipated adjustment. This move is expected to ease financial pressures on borrowers and support consumption as the country grapples with economic headwinds.Comprehensive Stimulus MeasuresThe recent rate cuts are part of a comprehensive stimulus package implemented by the PBOC, marking the most aggressive measures since the onset of the pandemic. On September 24, the central bank reduced the reserve requirement ratio for banks by 50 bps and cut the benchmark seven-day reverse repo rate by 20 bps. Additionally, a 30 bps cut in the medium-term lending facility rate was enacted last month.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>Economic Outlook and Challenges AheadRecent economic data suggests that China’s growth in the third quarter surpassed expectations, although investment in the property sector has plummeted by more than 10% in the first nine months of the year. Encouragingly, both retail sales and industrial production showed signs of recovery in September, indicating that the economy may be beginning to stabilize.Chinese officials remain optimistic about achieving the government's full-year growth target of approximately 5%. They have also indicated the possibility of further reductions to banks' reserve ratios by year-end, emphasizing a commitment to economic recovery.In conclusion, the recent cut in benchmark lending rates underscores the PBOC's proactive stance in fostering a conducive environment for growth. As China navigates through these challenging economic waters, the effectiveness of these measures will be closely monitored, with implications not only for domestic markets but also for the global economy.Also Read: <a href="https://www.sovrenn.com/knowledge/india-s-trade-deficit-shrinks-to-five-month-low-amid-export-resilience">India’s Trade Deficit Shrinks to Five-Month Low Amid Export Resilience</a>

In a significant monetary policy adjustment, China has cut its benchmark lending rates by 25 basis points (bps) during the monthly fixing on October 21, 2024. This decision aligns with market expectations and reflects the government's commitment to stimulate the economy amidst ongoing challenges. The one-year Loan Prime Rate (LPR) now stands at 3.10%, down from 3.35%, while the five-year LPR has been reduced to 3.60% from 3.85%.

China Cuts Benchmark Loan Prime Rates: A Strategic Move to Revitalize the Economy

IntroducionIndia’s trade deficit fell to $20.78 billion in September, the lowest in five months, offering a temporary relief amid global economic headwinds. This marks an improvement from $29.65 billion in August, reflecting both a modest rise in exports and a significant drop in imports. However, sequential declines in exports suggest that growth remains fragile.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;Export and Import TrendsMerchandise exports in September stood at $34.58 billion, marginally up from $34.41 billion a year ago but slightly lower than August’s $34.71 billion. Key sectors like&nbsp;engineering goods&nbsp;(up 10.5% YoY to $9.82 billion), pharmaceuticals, chemicals, and garments drove export growth. However, volatile global demand led to fluctuating monthly export figures, with exports falling from $38.13 billion in May to $33.98 billion in July.On the import side, September's imports were $55.36 billion, the lowest since May. A significant drop from August’s $64.36 billion indicates weakening domestic demand, particularly for commodities. Despite softer demand, oil imports—India’s largest import component—remain inelastic, making the trade balance vulnerable to global price shifts.Services Sector: A Key ContributorIndia’s services exports reached $30.61 billion in September, up from $28.42 billion a year earlier, driven by IT and financial services. Services imports also increased to $16.32 billion, reflecting higher demand for outsourced services. Combined merchandise and services exports totaled $65.19 billion, slightly lower than August’s $65.40 billion.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>Challenges and OutlookGlobal uncertainties, including geopolitical tensions in Ukraine and the Middle East, along with fluctuating oil prices, continue to pose challenges. The WTO expects global trade to grow by 2.6% in 2024, offering a potential tailwind for India’s exports.With major export destinations including the US, UAE, and China, India’s efforts to diversify trade and maintain resilient export sectors remain essential. “India is well-positioned to navigate headwinds with record forex reserves and robust export promotion measures,” said Manoranjan Sharma, Chief Economist at Infomerics Ratings.In the months ahead, managing geopolitical risks and oil price volatility will be key to maintaining trade momentum and narrowing the deficit further.Also Read:&nbsp;<a href="https://www.sovrenn.com/knowledge/ecb-poised-for-surprise-rate-cut-amid-growth-concerns"> RBI Repo Rate Cuts Likely Delayed to 2025 as Inflation Hits Nine-Month High</a>

India’s trade deficit fell to $20.78 billion in September, the lowest in five months, offering a temporary relief amid global economic headwinds. This marks an improvement from $29.65 billion in August, reflecting both a modest rise in exports and a significant drop in imports. However, sequential declines in exports suggest that growth remains fragile.

India’s Trade Deficit Shrinks to Five-Month Low Amid Export Resilience

IntroductionIndia and the United Arab Emirates (UAE) are on track to achieve $100 billion in non-oil tradeby 2030, according to the commerce ministry. This follows the second meeting of the Joint Committee (JC) under the Comprehensive Economic Partnership Agreement (CEPA), held in the UAE. The meeting, co-chaired by Ajay Bhadoo from India’s commerce department and Juma Al Kait from the UAE, highlighted the rapid trade growth since CEPA’s implementation in 2022.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>&nbsp;Key Focus Areas: TRQ and Jewellery TradeA major focus of the discussion was the implementation of Tariff Rate Quotas (TRQ), designed to allow UAE exporters to benefit from lower tariffs on specific products. India also requested designating the Indian Jewellery Exposition Center in Dubai as a trade zone, which would enable Indian jewellery manufacturers to access concessional duties.Advancing Trade in ServicesThe two countries discussed the importance of Mutual Recognition Agreements (MRAs), which would allow professionals such as lawyers, accountants, and healthcare workers to operate without additional certifications. They committed to holding a sub-committee meetingsoon to expedite these agreements.Concerns over Rising ImportsIndia raised concerns about a recent surge in silver products, platinum alloys, and dry datesimports from the UAE, emphasizing the need for strict adherence to rules of origin norms. Both countries agreed to ensure better verification processes.Finding multibagger stocks is important for building wealth. Discover potential multi-baggers at&nbsp;<a href="https://www.sovrenn.com/discovery/Large%20Order%20Receipts">Sovrenn Discovery.</a>Bilateral Trade GrowthTrade between India and the UAE has grown steadily, reaching $83.6 billion in 2023-24, up from $59.5 billion in 2013-14. While oil remains a key import, CEPA has encouraged growth in non-oil sectors, including manufacturing, jewellery, and services.Conclusion: A Promising Economic PartnershipThe India-UAE trade partnership is evolving rapidly under CEPA, with both sides committed to achieving their $100 billion non-oil trade target. The focus on TRQ, professional services, and compliance checks highlights their intent to maintain transparency and unlock further growth.With robust trade momentum, mutual cooperation, and reduced barriers, this partnership promises to shape a dynamic economic future for both nations.&nbsp;Also Read:<a href="https://www.sovrenn.com/knowledge/ecb-poised-for-surprise-rate-cut-amid-growth-concerns"> <span style="background-color:rgb(255,255,255);color:rgb(32,56,94);font-family:-apple-system, &quot;system-ui&quot;, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Fira Sans&quot;, &quot;Droid Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif;">RBI Repo Rate Cuts Likely Delayed to 2025 as Inflation Hits Nine-Month High</a>

India and the United Arab Emirates (UAE) are on track to achieve $100 billion in non-oil tradeby 2030, according to the commerce ministry. This follows the second meeting of the Joint Committee (JC) under the Comprehensive Economic Partnership Agreement (CEPA), held in the UAE. The meeting, co-chaired by Ajay Bhadoo from India’s commerce department and Juma Al Kait from the UAE, highlighted the rapid trade growth since CEPA’s implementation in 2022.

Date	Title
Nov 18th 24	Fed Chair Powell Stresses Caution on Rate Cuts Amid Economic Strength
Nov 12th 24	India’s Q3 Merchandise Exports Expected to Reach $107.5 Billion Amid Modest Recovery
Nov 11th 24	Inflation Squeezes Indian Households as CPI Hits 5.81% in October
Nov 8th 24	Fed Cuts Rates to 4.5% as Trump Secures Presidency
Nov 7th 24	Monsoon Rainfall Cools Diesel Demand, Slowing Excise Collection Growth
Nov 7th 24	India’s Manufacturing Rebounds in October Amid Rising Demand and New Orders
Nov 7th 24	India’s Service Sector PMI Surges in October: A Strong Rebound Amid Cost Pressures
Nov 7th 24	China’s Countermeasures in Place as Trump Threatens 60% Tariffs
Oct 31st 24	Swiss Companies Shift Focus from China to India
Oct 31st 24	India’s Fiscal Discipline and Core Sector Resurgence: H1 FY25 Highlights
Oct 29th 24	India’s Economic Growth is on Track, but Job Creation Remains a Challenge
Oct 29th 24	RBI’s Growth Estimates: Optimism or Overreach?
Oct 25th 24	India’s Oil Demand Set to Surge Amid Festivals and Rabi Season
Oct 24th 24	RBI Signals Flexibility but Keeps Inflation in Check
Oct 23rd 24	IMF Projects India’s FY25 Growth at 7%, Highlights Resilience Amid Global Headwinds
Oct 22nd 24	Fed Likely to Hold Rates in November as US Economy Defies Recession Fears
Oct 21st 24	ECB Cuts Interest Rates to 3.25% Amid Slowing Inflation to Support Growth
Oct 21st 24	China Cuts Benchmark Loan Prime Rates: A Strategic Move to Revitalize the Economy
Oct 17th 24	India’s Trade Deficit Shrinks to Five-Month Low Amid Export Resilience
Oct 16th 24	India-UAE Set to Achieve $100 Billion in Non-Oil Trade by 2030

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