Business & Economy Current Affairs 2017

IMF retains India 2017 GDP growth forecast at 7.2%

The International Monetary Fund (IMF) in its July World Economic Outlook (WEO) Update has retained India’s projected GDP growth rate at 7.2% for 2017-18, slightly up from 7.1% in the previous year.

However, update projects that India’s growth would accelerate to 7.7% in 2018-19. India’s economic growth slowed down to 7.1% in 2016-17, sharply lower than 8% in 2015-16 due to the effect of demonetisation.

Key Highlights of WEO Updates

Global Scenario: The global economic growth rate will be 3.5% in 2017 and 3.6% in 2018. The economic activity in both advanced and emerging and developing economies is accelerating. Moreover, inflation in advanced economies remains subdued and generally below target and also declining in several emerging economies.

United States growth projections are lower than in April WEO update, primarily reflecting that its fiscal policy will be less expansionary going forward than previously anticipated. The growth also has been revised up for Japan and especially the Euro area, indicating solid momentum in activity in late 2016 and early 2017. Growth in the ASEAN-5 economies is projected to remain robust at around 5 % with increase in global trade and strengthening domestic demand.

Indian Economy: It will be fastest growing major economy in the world and in Asia. According to government estimate, Indian economy is expected to grow 7.5% in the current financial year as abundant monsoon as rains are expected to boost rural income and overall growth.

China’s economy: It is projected to grow by 6.7% in 2017, up 0.1% points from the April 2017 forecast, and 6.4% in 2018, up by 0.2% points from earlier forecasts by the IMF. Despite China’s rise in growth projections, India’s economy will still be the fastest growing among large economies.

About World Economic Outlook (WEO)

The WEO is a survey conducted and published by the IMF. It is published biannually and partly updated two times a year. It portrays the world economy in the near and medium context, with growth projections for up to four years into the future. WEO forecasts include key macroeconomic indicators, such as GDP, inflation, fiscal balance and current account of more than 180 countries around the globe. It also deals with major economic policy issues.

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SEBI inks pact with ESMA for information exchange on CCPs

Markets regulator Securities and Exchange Board of India (SEBI) has entered into a Memorandum of Understanding (MoU) with the European Securities and Markets Authority (ESMA).

The MoU was signed for exchange of information concerning Central Counterparties (CCPs) under the European Markets Infrastructure Regulation (EMIR). CCPs are entities that help facilitate clearing and settlement activities.

Key Facts

The MoU establishes cooperation arrangements, including exchange of information regarding CCPs which are established and authorised or recognised in India by SEBI and which have applied for EU recognition under EMIR.

EMIR provides for signing of a cooperation arrangement between ESMA and relevant non-EU authorities, whose legal and supervisory framework for CCPs have been deemed equivalent to EMIR by the European Commission. Signing of MoU is one of the conditions for recognition of third country CCPs by ESMA under EMIR.

About Central Counterparty (CCP)

CCP is a corporate entity that exists in various European countries to help facilitate trading done in European derivatives and equities markets. It reduces counterparty, operational, settlement, market, legal and default risk for traders. It provides efficiency and stability to the financial markets in which they operate. CCP bear most of the credit risk of buyers and sellers when clearing and settling market transactions.

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