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World economy in slowdown, growth to be lowest in decade; to hit India harder: IMF chief

With global economic slowdown, growth in 2019-20 will fall to its lowest since the beginning of the decade, affecting emerging market economies such as India more.

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5 years ago

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international monetary fund

With economic slowdown affecting almost 90 per cent of the world, growth in 2019-20 will fall to its lowest rate since the beginning of the decade and this is having a “more pronounced” effect on emerging market economies such as India, said the new International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, on Tuesday, Oct 8.

Georgieva took over leadership at the IMF from Christine Lagarde as MD on Oct 1. Georgieva made this assessment one week ahead of the joint Annual Meeting between the IMF and World Bank (WB) in which both institutions will present their economic projections in a gathering of top central bankers and economy ministers.

The fund is due to release details in its updated World Economic Outlook on October 15.

“Two years ago, the global economy was in a synchronized upswing. Measured by GDP, nearly 75 per cent of the world was accelerating. The global economy is now in a synchronized slowdown. In 2019, we expect slower growth in nearly 90 per cent of the world,” said Georgieva in her first speech as MD, IMF.

“In the United States and Germany, unemployment is at historic lows. Yet across advanced economies, including in the US, Japan, and especially the Euro area, there is a softening of economic activity,” she said.

“In some of the largest emerging market economies, such as India and Brazil, the slowdown is even more pronounced this year,” she added.

She said the IMF is cutting its forecasts for growth this year and next. Previously, the world economy had been projected to expand by 3.2 per cent in 2019 and 3.5 percent in 2020.

The IMF had cut its projection for India’s economic growth by 0.3 percentage points to 7 per cent for the fiscal year 2019-20 owing to the “weaker-than-expected outlook” for the domestic demand.

Georgieva attributed the slowdown to a range of uncertainties — she called them “fractures” — including trade tensions, Brexit and geopolitical tensions.

Georgieva said that currencies are once again in the spotlight and disputes now extend between multiple countries and into other critical issues.

“Even if growth picks-up in 2020, the current rifts could lead to changes that last a generation — broken supply chains, siloed trade sectors, a ‘digital Berlin Wall’ that forces countries to choose between technology systems,” she said.

The IMF Managing Director said that global trade growth has come to a “near standstill.”

Amid rising trade war between the countries which is generally fought through tariffs and counter-tariffs, the chief called for nations to work together.

While trade tensions had been talked about as a danger to the economy, “now, we see that they are actually taking a toll,” she said.

She said trade tensions could result in “substantial weakening” of manufacturing and investment activity, and could subsequently affect services and consumption.

“Everyone loses in a trade war. For the global economy, the cumulative effect of trade conflicts could mean a loss of around $700 billion by 2020, or about 0.8 per cent of GDP. As a reference, this is approximately the size of Switzerland’s entire economy,” she said.

Georgieva compared the present scenario to that of two years ago, before the US-China trade war, when countries representing nearly 75 per cent of the world’s output were seeing accelerating growth.

To protect against a sharp global slowdown, Georgieva called on countries with funds available to deploy their “fiscal firepower”. She called for a “coordinated” response to the slowdown. “The world economy is still growing, it is just growing too slowly. To reverse this trend, and meet the aspirations of people, we cannot afford to be complacent. We must act,” she said.

The IMF chief’s statement came even as the Reserve Bank of India (RBI) said that the Indian economy which has largely been subdued in the past few quarters and signs of a slowdown have cropped up, is likely to face several more risks in the near term.

The RBI in its Monetary Policy Report, October 2019, has also said that a combination of domestic and global headwinds has depressed economic activity in the country “especially in terms of aggregate demand”. The near-term outlook of the Indian economy is fraught with several risks, said the report.

It said that private consumption, which is the major support of economic activity, has started to slow down due to several reasons.

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Zomato introduces Food Rescue feature

“We don’t encourage order cancellation at Zomato, because it leads to a tremendous amount of food wastage,” he said.

Published

2 weeks ago

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November 10, 2024

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Zomato has introduced a new feature called Food Rescue to minimise food wastage, announced the food delivery platform CEO Deepinder Goyal on Sunday.

Announcing the new feature on X, Goyal said the decision, to introduce the new feature, was taken to prevent the tremendous amount of food wastage due to order cancellation on the platform.

Committed to minimising food wastage, the Zomato boss said: “We don’t encourage order cancellation at Zomato, because it leads to a tremendous amount of food wastage.”

Goyal said despite having stringent policies, and a no-refund policy for cancellations, more than 4 lakh perfectly good orders get cancelled, for various reasons by customers.

He said the top concern for the online food delivery platform, the restaurant industry, and even the customers who cancel these orders, is to somehow save the food from going to waste.

With the launch of the new feature, Food Rescue, cancelled orders will now pop up for nearby customers, who can grab them at an unbeatable price, in their original untampered packaging, and receive them in just minutes.

According to Zomato, the cancelled order will pop up on the app for customers within a 3 km radius of the delivery partner carrying the order. To ensure freshness, the option to claim will only be available for a few minutes.

The online food delivery platform will not keep any proceeds except the required government taxes and the amount paid by the new customer will be shared with the original customer (if they made payment online) and with the restaurant partner.

Orders containing items sensitive to distances or temperature such as ice creams, shakes, smoothies, and certain perishable items, will not be eligible for Food Rescue.

Restaurant partners will continue to receive compensation for the original cancelled order, plus a portion of the amount paid by the new customer if the order is claimed, the company said. “Most restaurants have opted in for this feature, and can opt of it easily whenever they want, directly from their control panels,” it added.

The delivery partners will be compensated fully for the entire trip, from the initial pickup to the final drop-off at the new customer’s location, it said.

Food Rescue will show up on the customers’ home page automatically if there’s a cancelled order available for them to grab. The Customers have to refresh the home page to check for any newly available orders which need to be rescued.

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Adani, Torrent compete to purchase Gujarat Titans from CVC Capital

The probable sale of the Gujarat Titans, with the lock-in period coming to a close, will therefore be a defining moment in the changing face of IPL investments.

Published

4 months ago

on

July 19, 2024

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The Adani Group and Torrent Group are currently negotiating a deal with private equity firm CVC Capital Partners to offload a controlling stake in the Indian Premier League franchise Gujarat Titans. According to sources, close to the development, reports say CVC Capital Partners will be looking to sell a majority interest while retaining a minority share in the franchise.

This becomes important because it is aligned with the end of the lock-in period by the Board of Control for Cricket in India (BCCI), which restricts any new teams from selling stakes until February 2025. The three-year-old franchise Gujarat Titans is reportedly worth $1 billion to $1.5 billion. CVC Capital Partners had paid ₹5,625 crore for the franchise in 2021.

A source close to the development pointed out that IPL franchises have attracted many investors’ interest since the league has proved an asset with a good reputation for money-making capabilities and cash flows. This growing interest of investors embodies the financial value and stability that come with the IPL franchises.

Gautam Adani, who owns teams in the Women’s Premier League and UAE-based International League T20, is understood to be one of the serious buyers. In 2023, Adani’s group won the Ahmedabad franchise in the WPL with a bid of Rs1,289 crore, the highest offer. His interests in this potential deal signal his commitment to expanding his footprint in the cricketing world.

Arvinder Singh, COO of Gujarat Titans, exuded confidence in the financial future of the franchise. He said the team was confident of turning profitable in the next media rights cycle, referring to even the original ten IPL franchises that took four to five years to turn profitable. He added confidently that the Gujarat Titans would not only turn profitable but significantly enhance in brand value.
 
This surging interest of investors in it is evidence of the growing financial attractiveness of IPL franchises, driven by healthy revenue streams and an increasing global footprint. The probable sale of the Gujarat Titans, with the lock-in period coming to a close, will therefore be a defining moment in the changing face of IPL investments.

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PayTm share price slips 2 per cent over SEBI warning

Published

4 months ago

on

July 16, 2024

By

Paytm

The share price of PayTm fell by nearly 2 per cent on Tuesday following a warning from the the Securities and Exchange Board of India (SEBI).

PayTm’s parent One 97 Communication had got SEBI’s administrative warning letter on some transactions involving the PayTm Payments Bank during fiscal year 2021-2022. The bourses reacted strongly leading to PayTm shares falling by 1.88% to Rs 460.80 per share on the Bombay Stock Exchange.

SEBI said it had noted the violation with concern and said these matters are being viewed very seriously. The regulator warned the company to exercise caution going forward and improve compliance to rules to prevent similar incidents in the future.

The markets regulator added that failure to comply with rules may force it to invoke enforcement actions as per the law.

In its response to SEBI, PayTm said in a media release that it has always followed listing regulations, as well as any change to these rules over time. The company said it would keep up its commitment to maintain and follow high standards of compliance. Paytm said it intends to provide an adequate response to SEBI on this matter.

PayTm said it has always followed Regulation 23 along with Regulation 4(1)(h) of the SEBI Listing Regulations, without including any change made to these rules over time. Paytm added that the letter from  SEBI has no influence on its finances, operations or other activities in any way.

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