Annual Budget may usher in phase of fiscal and monetary stimulus with demonetization to sustain momentum for exports and industry: FIEO
Author(s): City Air NewsNew Delhi/Ludhiana, November 30, 2016: Shri S C Ralhan, President, FIEO while commenting on the economic forecasts for 2017, which projected continued frailty in the global economy, and sub par growth for most countries...
cityairnews
Nov 30, 2016 12:30
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New Delhi/Ludhiana, November 30, 2016: Shri S C Ralhan, President, FIEO while commenting on the economic forecasts for 2017, which projected continued frailty in the global economy, and sub par growth for most countries and regions stated that obvious economic problems include that in Europe, slowdown in Chinese market, historically high private and public debt – 225% of GDP, according to the IMF besides additional global economic risks, such as a major oil-market disruption that may drive prices up could be in the offing.
Further, data from the CPB Netherlands Bureau for Economic Policy Analysis still points to quarter-on-quarter stagnation of global export volumes in Q3, after a -0.7% quarter-on-quarter decline in Q2. In 2017, global trade may grow by a modest +3.1% but in value terms, global trade will contract by -2.9% this year. Between 2014 and 2016, the world has lost -USD 3129 billion in exchanged goods and services, an amount close to the GDP of Germany.
Poor demand pick-up, the super slump in commodities prices, currency war, and domesticalization (lesser dependence on trade) explain this disappointing performance.
FIEO Chief stated that growth in the volume of world trade is expected to stay below +4% annually and the reasons behind this may be structural shifts in global demand as the US and China have retreated for good, and (non-tradeable) services have grown faster than before in most countries; financial fragmentation makes trade and debt financing (in USD) very complicated and competitive devaluation have failed besides the business being impacted by growing protectionism measures.
Given the scenario, FIEO Chief stated that in order to keep the momentum on exports and business complimenting fiscal and monetary stimulus measures may be announced in the Annual Budget such as the sectoral schemes already announced to Textiles for others at the sectoral level and those for exports per se.
