Business, Economy & Banking Current Affairs - 2019
Business, Economy and Banking in Current Affairs 2019 with latest news and current affairs in Agriculture, Industry, Banking, Capital Markets, Import and Export and Government schemes in commercial sector.
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A study by the global investment banking, securities and investment management firm, Goldman Sachs has stated that Brexit has cost Britain nearly 2.5% of GDP.
Findings of the Study
- Britain’s economy has lost nearly 2.5 per cent of GDP relative to its growth path prior to the mid-2016 referendum on exiting the European Union (EU) and has lagged other advanced economies as uncertainty dents investment.
- Policy makers in the UK are still struggling to chalk out the Brexit modalities. The resulting uncertainty over the future political and economic relations with the EU has resulted in real costs for the UK economy and has a spillover effect on other economies.
- Brexit uncertainty has been a major driver of economic output losses as they are concentrated in investment.
- Goldman Sachs predicts that the Brexit cost stood at around 600 million pounds ($785 million) per week since the referendum.
- Further, in a no-deal Brexit scenario it predicts a 15 per cent chance of, Britain witnessing output losses with a ”substantial” global confidence shock marked by sharp sterling depreciation.
The study notes that the Brexit will have spillover effects and European countries would be most exposed to this scenario and estimates an output loss of around 1 per cent of real GDP.
India’s external debt has witnessed a decline of 1.6% to US$ 521.2 billion at end-December 2018 over its level at end-March 2018, on account of the decrease in commercial borrowings and trade credit. Further:
- There had been a valuation gain in external debt as at end December 2018 due to the depreciation of the US dollar vis-a-vis the Indian rupee and other major currencies (viz., SDR, yen, euro, and pound sterling), were placed at US$ 20.6 billion.
- If the valuation effect was excluded the external debt as at end December 2018 would have been US$ 541.8 billion.
- Commercial borrowings were the largest component of external debt with a share of 37.4%, followed by NRI deposits (24.1%) and short term trade credit (19.9%).
- The long-term debt (with an original maturity of above one year) was placed at US$ 417.3 billion at end-December 2018.
- The share of long-term debt in total external debt at the end of December was 80.1%. It was lower than its level of 80.7% at the end of March 2018.
- The share of short-term debt (with an original maturity of up to one year) in total external debt increased to 19.9% at end-December 2018 from 19.3% at end-March 2018.
- US dollar denominated debt continued to be the largest component of India’s external debt with a share of 45.9% at end December 2018, followed by the Indian rupee (24.8%), SDR (5.1%), yen (4.9%) and euro (3.1%).
The outstanding debt of both government and non-government sectors had decreased at end-December 2018, in comparison to end-March 2018, however, increased in comparison to end-September 2018.