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IMF raises Global growth estimates to 3 % in 2023

NEW YORK: The International Monetary Fund has raised its 2023 globalgrowthestimatesslightlygiven resilient economic activity in the first quarter, but warned that persistent challenges were dampening the medium-termoutlook.

The IMF in its latest World Economic Outlook said inflation was coming down and acute stress in the banking sector had receded, but the balance of risks facing the global economy remained tilted to the downsideandcreditwastight.

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The global lender said it now projected global real GDP growth of 3.0% in 2023, up 0.2 percentage point from its April forecast, but left its outlook for 2024 unchanged, also at 3.0%.

The 2023-2024 growth forecast remainsweakbyhistoricalstandards, well below the annual average of 3.8% seen in 2000-2019, largely due to weaker manufacturing in advanced economies, and it could stay at that levelforyears.

“We're on track, but we're not out of the woods," IMF chief economist Pierre-Olivier Gourinchas told Reuters in an interview, noting that the upgrade was driven largely by first-quarter results. "What we are seeing when we look five years out is actually close to 3.0%, maybe a little bit above 3.0%. This is a significant slowdown compared to what we had pre-COVID."

This was also related to the aging of the global population, especially in countries like China, Germany and Japan, he said. New technologies could boost productivity in coming years, but that in turn could be disruptivetolabormarkets.

The outlook is "broadly stable" in emerging market and developing economies for 2023-2024, with growth of 4.0% expected in 2023 and 4.1% in 2024, the IMF said. But it noted that credit availability is tight and there was a risk that debt distress could spreadtoawidergroupofeconomies.

The world is in a better place now, the IMF said, noting the World Health Organization's decision to end the globalhealthemergencysurrounding COVID-19, and with shipping costs and delivery times now back to prepandemiclevels.

Gujarat Exporters in fury as Pharma and Agro Exports delayed due to closure of GAL cargo centre

AHMEDABAD: The export of perishable goods from Gujarat has faced significant delays, lasting at least 10 days, since the closure of the cargo centre owned by Gujarat Agro Limited(GAL).

The company’s cargo operations stopped a month ago due to its failure to renew the tender and obtain securityclearancefromtheBureauof Civil Aviation Security (BCAS). The sudden closure of the cargo centre has not just added to the compliance burden of exporters but also increased the cost of shipments and the turnaround time for processingandshipment.

Chinmay Kothari, Partner at a Customs Clearing Agent’s rm, Domino Cargos, explains, “The cargo centre managed by Gujarat Agro Limited handled an estimated 1,500 tonnes of export volumes of perishable cargo, including pharmaceutical products, fruits, vegetables, and mangoes, every month. Since no other cargo complex in the area can handle perishable goods, all such shipments are now routed through busier air cargo centresinMumbaiorDelhi.

“Since these centres have shipments of their own, the additional cargo gets pushed down the list. Merely shifting the cargo centre adds up to 5% extra cost for exporters. Then, one must bear the cost of storing perishable goods in specific temperature conditions until they are shipped out. This has led to a lot of chaos and added to the turnaround timeofshipments,causingdelaysand increasedcostsforexporters.”

Sources revealed that at least 760tonnesofcargowashandledatthe centrefromJune1-15.“Theothertwo cargo centres – one run by GSEC and the other by Adani – are not fully equipped to handle perishable cargo. Therefore, the general shipments are routed through them,” a customs brokerexplained.

The Ahmedabad Air Cargo Complex (AACC) run by GSEC, which handles about 80 tonnes of cargo daily, now tackles anywhere between 120 and 150 tonnes of freight in a given day since the other centre has stopped operating. Sources said this has led to much fury amongst the merchant and industrial exporters whoseshipmentsaredelayed.

Customs Brokers also expressed concerns over freight aircraft cancelling operations due to a lack of cargo availability due to the unit’s closure.

GAL has finally floated a tender inviting bids for operating, maintainingandmanagingthecentre for perishable and general cargo at SVPI Airport from July 21 to July 31. Following this, the tender will be awarded,afterwhichthecargocentre willbeoperationalized.

Rupee use in trade transaction with UAE to reduce MSMEs’ conversion costs: Piyush Goyal

MUMBAI: India’s plan to use the rupee for trade transactions with the UAE could unlock major trade opportunities and reduce conversion costs for small businesses, according to Commerce and Industry MinisterShriPiyushGoyal.

“By implementing the Rupee currency in UAE trade, we aim to open vast trade opportunities while addressing the 5-6% costs incurred otherwise in currency conversion, impacting MSMEs significantly,” said Goyal, highlighting the strategic importanceofthisdecision.

This strategy is expected to deepen economic ties between India and the UAE, with a consequential uplift in bilateral trade. Furthermore, the move would introduce greater flexibility for businesses involved in cross-border transactions, thereby streamlining and making the trading process more economical.Goyalalsounderscoredthe government’s commitment to boosting international partnerships and trade collaborations, citing recent trade agreements with Australia and the

UAE, as well as ongoing discussions regarding Free Trade Agreements (FTAs)withtheUK,EU,andCanada.

Goyal’s statement came during the celebration of the 30th anniversary of CareEdge Ratings. The Minister lauded the remarkable growth of India’s economy and said a significant part of this growth was due to the thriving exportsector.Ithasplayedavitalrole in contributing to the nation’s GDP, nearly doubling its share from 13.7% inFY04to23.5%inFY23,hesaid.

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