Volume 2
Issue 2
Aug 2013
From the Vice President’s Desk
Greetings from mjunction! Even as we celebrate our 67th year of independence, India is showing stagflationary tendencies with rising inflation and falling outputs, declining growth and rising unemployment. India's GDP growth fell to 5% in the first quarter, the lowest in a decade, and is expected to fall further, even as inflation rises. The depreciating Rupee lost over 12% and reached an all-time low of INR 64.31 to the dollar. The flash floods in Uttarakhand left a huge trail of death and devastation. Entire villages were swept away and thousands were left homeless. mjunction stood by the distressed during this time of national crisis. Not only did junctionites volunteer to donate a day’s salary, mjunction also put its expertise to use for procuring blankets, tarpaulins and food packets for the relief efforts when it received a mandate from Tata Relief Committee. In the second issue of financejunction Connect, we have shared a synopsis of the economy, the supply chain finance industry and how it assists in these difficult market situations. I hope you enjoy this newsletter and it adds to your knowledge of macro-economic scenario in India.
Regards,
Vinaya Varma, Vice President, mjunction
PART 1 ECONOMY & MARKET REVIEW
Vinaya Varma, Vice President, mjunction
GLOBAL GDP GROWTH
GLOBAL ECONOMIC SCENARIO
Emerging market and developing economies
6
6
5
5
4
3
2
2
1
1
Advanced Economies
0
0
-1
-1
-2 Source: IMF staff estimtes
4 3
1.9 -0.6
-2
6
6.2
5.7
2 1.1
-0.3
-0.2 -0.2 -0.1 -0.2
-0.1 0 -0.3 -0.1
Euro Area -4 India
-6
10 8
8.2
4 2.2
Difference from January 2013 WEO projections
Difference from January 2013 WEO projections 8
7.8
4 0 1.8 1.4
-2 2013 Q4
2012
2011
7.7
2
4
World
3
Projections
6
8 7
7
9.3
8
The IMF projects a bumpy recovery for global economy China
8
10
Latest IMF Projections
Unites States
9
9
Weak domestic demand and a slow growth in key emerging markets coupled with the recessionary tendencies lead to the subdued global growth projections at a little over 3%. This is the same as it was in 2012 and is lower than the forecast in April 2013 World Economic Outlook (WEO). At 5% in 2013 and about 5½%in 2014, the emerging markets and developing economiesare now expected to grow at a moderate pace, around ¼% points slower than in the April 2013 WEO. Global growth increased only slightly from an annualized rate of 2½% in the second half of 2012 to 2¾% in the first quarter of 2013. In 2014, global growth is expected to recover to 3¾% from the projected 3% in 2013.
0 -0.2 -0.2 -0.3 -0.2
-0.2 -0.1 -0.6 -0.1
-2 -4
2011
2012
2013
2014
1
2013
2014
-6