Qatar is looking to Asia for foreign investment in a “new era” for the country, following the blockade by a number of major Arab nations in June last year.
Yousuf Mohamed Al-Jaida, the CEO of the Qatar Financial Center, a business and financial center located in Doha, told CNBC Friday that the country has moved to attract foreign investment by making it easier to get business visas and buy real estate.
“Qatar is looking for new partners, new alliances, so we are moving on,” he said.
“Our presence in Hong Kong speaks a lot. We’re going to be doing a lot of more tours in Asia, Thailand, Vietnam, within the next two months,” he added.
Saudi Arabia, United Arab Emirates, Bahrain, and Egypt imposed trade and travel bans on Qatar in 2017, blaming the country for supporting terrorism.
The Qatar Financial Center, which aims to foster investment in Qatar, has been explaining to foreign investors that, after the deterioration of relations between Qatar and other Arabic countries, the country has been putting forward a slew of reforms to adapt to a “new reality.”
“The appetite is good, I think we have to do a lot more of awareness as to what the blockade means. What we are trying to pitch in terms of the blockade is that this is a new era for Qatar,” Al-Jaida said.
The World Bank today projected India’s GDP growth at 7.3 per cent for the next financial year and accelerate further to 7.5 per cent in 2019-20.
The World Bank’s biannual publication, India Development Update: India’s Growth Story, expects the economy to clock a growth rate of 6.7 per cent in the current fiscal ending March 31.
The report, however, observed that a growth of over 8 per cent will require “continued reform and a widening of their scope” aimed at resolving issues related to credit and investment, and enhancing competitiveness of exports.
“The Indian economy is likely to recover from the impact of demonetisation and the GST, and growth should revert slowly to a level consistent with its proximate factors — that is, to about 7.5 per cent a year,” the report said.
In November 2016, the government had scrapped high value currency notes of Rs 500 and Rs 1,000 in a bid to check black money, among others.
Later, India implemented its biggest indirect tax reform — Goods and Services Tax (GST).
Both of these initiatives had impacted the economic activities in the country in short run.
India’s economic growth had slipped to a three year low of 5.7 per cent in April-June quarter of the current fiscal, though it recovered in the subsequent quarters.
The economy is expected to grow at 6.6 per cent in the current fiscal ending March 31, as per the second advanced estimates of the Central Statistics Office (CSO), compared to 7.1 per cent in 2016-17. The earlier estimate was 6.5 per cent.
The Economic Survey tabled in Parliament has projected a growth rate of 7 to 7.5 per cent in the 2018-19 financial year.
The World Bank report further said that accelerating the growth rate will also require continued integration into global economy.
It pitches for making growth more inclusive and enhancing the effectiveness of the Indian public sector.
IMF has underscored the significance of reforms in other key sectors like education, health and improving the efficiency of the banking and financial systems.
The Indian economy now seems to be on its way to recovering from disruptions caused by demonetisation and roll-out of goods and services tax, the IMF said today. At the same time, the IMF has underscored the significance of reforms in other key sectors like education, health and improving the efficiency of the banking and financial systems.
India’s economy has expanded strongly in recent years, thanks to macroeconomic policies that emphasise stability and efforts to tackle supply-side bottlenecks and structural reforms. Disruptions from demonetisation and the rollout of the goods and services tax (GST) did slow growth,” Tao Zhang, Deputy Managing Director of IMF, told PTI in an interview.
“However, with the economy expanding by 7.2 per cent in the latest quarter, India has regained the title of the fastest-growing major economy, Zhang said.
Calling this development a “welcome change”, Zhang said the growth prospects remain positive.
“That said, the Indian economy would benefit from further reforms, such as enhancing health and education, encouraging private and public investment, and improving the efficiency of the banking and financial system. This would support durable and inclusive growth and enable India to move toward the income levels of wealthier countries, the top IMF official said ahead of his visit to India.
Given the dominance of cash in everyday transactions in the Indian economy it was inevitable that demonetization would temporarily affect economic activity, said Zhang who is travelling to India and Bhutan from March 12 until March 20.
The rollout of the GST last year was a landmark accomplishment that can be expected to enhance the efficiency of intra-Indian movement of goods and services, create a common national market, enhance tax buoyancy, and boost GDP growth and job creation, he said.
Yet the complexities and glitches in GST implementation also resulted in short-term disruptions. As I mentioned earlier, the economy now seems to be on its way to recovering from those disruptions, Zhang said in response to a question.
When asked about the latest Indian budget, which many critics say is protectionist in nature, Zhang said IMF research indicates that tariffs are broadly contractionary, reducing output, investment, and employment.
Trade tariffs may give limited relief to industries and workers that directly compete with affected imports. However, they can raise costs to consumers and other businesses that use the protected products. Tariffs also would reduce incentives for businesses to compete and improve efficiency, he cautioned.
Since the opening of the economy starting in the early-1990s, India has benefitted from trade liberalization, he observed.
Further supply-side reforms aimed at improving the business climate could enhance these benefits, the top IMF official asserted.
Noting that the IMF and India have close relations, and the two have always been good partners, Zhang said his visit is a reflection of this partnership, as is the newest regional capacity development center, SARTTAC, based in New Delhi.
The center partners with India and its South Asian neighbors to build strong institutions and implement policies that promote growth and poverty reduction in the region, he said.
My visit is an opportunity to exchange views with the Indian authorities, senior RBI officials, and representatives from the Indian business community, civil society, and others, he said.
Zhang will also have a presentation on financial technology that will take place on Monday at the National Stock Exchange of India.
We will go over the latest trends in financial technology and their effects on the global economy and India, said the top IMF official.
Private equity (PE) investors announced deals worth $983 million in January, a 23 per cent rise in value terms over last year, driven by big ticket transactions, says a Grant Thornton report.
According to the assurance, tax and advisory firm, in January, there were 84 PE deals worth $983 million, against 81 such transactions worth $796 million in January 2017.
“Private equity deals recorded 4 per cent increase in deal volumes and 23 per cent increase in deal value in January 2018 as compared to January 2017,” said Pankaj Chopda Director at Grant Thornton India LLP.
January was dominated by investments in start-ups which contributed to 52 per cent of total investment volumes. On the other hand, energy & natural resources and real estate sectors witnessed big-ticket PE investment over $100 million together capturing 39 per cent of total PE deal values.
Altico Capital’s investment of $195 million across five realty projects in Hyderabad and Pune was the top PE deal in January.
Other major transactions include Canada Pension Plan Investment Board’s 6 per cent stake acquisition in ReNew Power Ventures for $144 million and Warburg Pincus and SAIF Partners’ $50 million investment in Rivigo Services.
Going forward, the PE deal outlook looks bullish especially for the start-up sector.
“Increasing customer penetration in online transactions and increasing solutions to simplify online transactions offered by start-ups will attract interest in start-ups engaged in retail, fintech, foodtech, on demand services and travel and logistics,” Chopda said.
“Government reforms such as RERA, focus on cleantech and on increasing digital financial transactions will drive the momentum in banking and financial, real estate and energy and natural resources.
India-specific strategies by global and already present PE firms and funds raised by new players will act as catalyst for PE transactions,” he added.
India’s growth rate in 2018 is projected to hit 7.3 per cent and 7.5 per cent in the next two years, according to the World Bank, which said the country has “enormous growth potential” compared to other emerging economies with the implementation of comprehensive reforms.
India is estimated to have grown at 6.7 per cent in 2017 despite initial setbacks from demonetisation and the Goods and Services Tax (GST), according to the 2018 Global Economics Prospect released by the World Bank here yesterday.
“In all likelihood India is going to register higher growth rate than other major emerging market economies in the next decade. So, I wouldn’t focus on the short-term numbers. I would look at the big picture for India and big picture is telling us that it has enormous potential,” Ayhan Kose, Director, Development Prospects Group at the World Bank, told PTI in an interview.
He said in comparison with China, which is slowing, the World Bank is expecting India to gradually accelerate.
“The growth numbers of the past three years were very healthy,” Kose, author of the report, said.
India’s economy is likely to grow 7.3 per cent in 2018 and then accelerate to 7.5 per cent in the next two years, the bank said.
China grew at 6.8 per cent in 2017, 0.1 per cent more than that of India, while in 2018, its growth rate is projected at 6.4 per cent. And in the next two years, the country’s growth rate will drop marginally to 6.3 and 6.2 per cent, respectively.
To materialise its potential, India, Kose said, needs to take steps to boost investment prospects.
There are measures underway to do in terms of non- performing loans and productivity, he said.
“On the productivity side, India has enormous potential with respect to secondary education completion rate. All in all, improved labour market reforms, education and health reforms as well as relaxing investment bottleneck will help improve India’s prospects,” Kose said.
India has a favourable demographic profile which is rarely seen in other economies, he said.
“In that context, improving female labour force participation rate is going to be important. Female labour force participation still remains low relative to other emerging market economies,” he said.
Reducing youth unemployment is critical, and pushing for private investment, where problems are already well-known like bank assets quality issues…If these are done, India can reach its potential easily and exceed, Kose asserted.
“In fact, we expect India to do better than its potential in 2018 and move forward,” he said.
India’s growth potential, he said would be around 7 per cent for the next 10 years.
The Indian government is “very serious” with the GST being a major turning point and banking recapitalisation programme is really important, Kose said.
“The Indian government has already recognised some of these problems and undertaking measures and willing to see the outcomes of these measures,” he said.
“India is a very large economy. It has a huge potential. At the same time, it has its own challenges. This government is very much aware of these challenges and is showing just doing its best in terms of dealing with them,” the World Bank official said.
The latest World Bank growth estimate for 2017 is 0.5 per cent, less than the previous projection, and 0.2 per cent less in the next two years.
“It is slightly lower than its previous forecast, primarily because India is undertaking major reforms,” Kose said.
These reforms, of course, will bring certain policy uncertainty, he said, “but the big issue about India, when you look at India’s growth potential and our numbers down the road 2019 and 2020, is that it is going to be the fastest growing large emerging market.”
“India has an ambitious government undertaking comprehensive reforms. The GST is a major reform to have harmonised taxes, is one nation one market one tax concept. Then, of course, the late 2016 demonetisation reform was there. The government is well aware of these short-term implications,” Kose said.
He said there might have been some temporary disruptions but “all in all” the Indian economy has done well.
“The potential growth rate of the Indian economy is very healthy to 7 per cent. I think the growth is going to be at a high rate going forward,” the World Bank official said.
In a South Asia regional press release, the World Bank said India is estimated to grow 6.7 percent in fiscal year 2017-18, slightly down from the 7.1 percent of the previous fiscal year.
This is due in part to the effects of the introduction of the Goods and Services Tax, but also to protracted balance sheet weaknesses, including corporate debt burdens and non- performing loans in the banking sector, weighing down private investment, it said.
The International Monetary Fund (IMF) on Tuesday pared its growth forecast for the Indian economy by half a percentage point to 6.7% for 2017, blaming the lingering disruptions caused by demonetisation of high value currencies last year and the roll out of the Goods and Services Tax (GST).
However, IMF said the structural reforms undertaken by the Prime Minister Narendra Modi-led government would trigger a recovery—above 8% in the medium term.
In its latest World Economic Outlook, IMF said the global economy is going through a cyclical upswing that began midway through 2016. It raised the global growth estimate marginally for 2017 to 3.6% while flagging downside risks. The upward revisions in its growth forecasts including for the euro area, Japan, China, emerging Europe, and Russia more than offset downward revisions for the United States, the United Kingdom, and India.
“In India, growth momentum slowed, reflecting the lingering impact of the authorities’ currency exchange initiative as well as uncertainty related to the midyear introduction of the countrywide Goods and Services Tax,” it said in the WEO.
However, IMF expects the Indian economy to recover sharply in 2018 to grow at 7.4%, though 30 basis points lower than its earlier estimate in April.
One basis point is one-hundredth of a percentage point.
In its South Asia Economic Focus (Fall 2017) released on Monday, the World Bank reduced India’s GDP growth forecast to 7% for 2017-18 from 7.2% estimated earlier, blaming disruptions caused by demonetisation and GST implementation, while maintaining at the same time that the Indian economy would claw back to grow at 7.4% by 2019-20.
Both the Asian Development Bank as well as the Organisation for Economic Cooperation and Development (OECD) have also cut their growth projections for India to 7% and 6.7%, respectively, for fiscal 2017-18.
IMF said a gradual recovery in India’s growth trajectory is a result of implementation of important structural reforms. GST, “which promises the unification of India’s vast domestic market, is among several key structural reforms under implementation that are expected to help push growth above 8% in the medium term,” it added.
The multilateral lending agency said India needs to focus on simplifying and easing labour market regulations and land acquisition procedures which are long-standing requirements for improving the business climate. It also called for briding the gender gap in accessing social services, finance and education to accelerate growth in developing countries like India.
IMF said given faster-than-expected declines in inflation rates in many larger economies, including India, “the projected level of monetary policy interest rates for the group is somewhat lower than in the April 2017 WEO.”
In its monetary policy review last week, the Reserve Bank of India (RBI) kept its policy rates unchanged and marginally raised its inflation forecast for rest of the year.
Highlighting the growing income inequality within and among emerging market economies, IMF said a country’s growth rate does not always foretell matching gains in income for the majority of the population. “In China and India, for example, where real per capita GDP grew by 9.6% and 4.9% a year, respectively, in 1993–2007, the median household income is estimated to have grown less—by 7.3% a year in China and only 1.5% a year in India,” it said.
India has been ranked as the 40th most competitive economy — slipping one place from last year’s ranking — on the World Economic Forum’s global competitiveness index, which is topped by Switzerland.
On the list of 137 economies, Switzerland is followed by the US and Singapore in second and third places, respectively.
In the latest Global Competitiveness Report released today, India has slipped from the 39th position to 40th while neighbouring China is ranked at 27th.
“India stabilises this year after its big leap forward of the previous two years,” the report said, adding that the score has improved across most pillars of competitiveness. These include infrastructure (66th rank), higher education and training (75) and technological readiness (107), reflecting recent public investments in these areas, it added.
According to the report, India’s performance also improved in ICT (information and communications technologies) indicators, particularly Internet bandwidth per user, mobile phone and broadband subscriptions, and Internet access in schools.
However, the WEF said the private sector still considers corruption to be the most problematic factor for doing business in India.
“A big concern for India is the disconnect between its innovative strength (29) and its technological readiness (up 3 to 107): as long as this gap remains large, India will not be able to fully leverage its technological strengths across the wider economy,” it noted.
Among the BRICS, China and Russia (38) are placed above India.South Africa and Brazil are placed at 61st and 80th spots, respectively.
In South Asia, India has garnered the highest ranking, followed by Bhutan (85th rank), Sri Lanka (85), Nepal (88), Bangladesh (99) and Pakistan (115).
“Improving ICT infrastructure and use remain among the biggest challenges for the region: in the past decade, technological readiness stagnated the most in South Asia,” WEF said.
Other countries in the top 10 are the Netherlands (4th rank), Germany (5), Hong Kong SAR (6), Sweden (7), United Kingdom (8), Japan (9) and Finland (10).
The Global Competitiveness Index (GCI) is prepared on the basis of country-level data covering 12 categories or pillars of competitiveness.
Institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation are the 12 pillars.
According to WEF’s Executive Opinion Survey 2017, corruption is the most problematic factor for doing business in India.
The second biggest bottleneck is ‘access to financing’, followed by ‘tax rates’, ‘inadequate supply of infrastructure’, ‘poor work ethics in national labour force’ and ‘inadequately educated work force’, among others.
The survey findings are mentioned in the report.
“Countries preparing for the Fourth Industrial Revolution and simultaneously strengthening their political, economic and social systems will be the winners in the competitive race of the future,” WEF founder and Executive Chairman Klaus Schwab said.