Addressing the Demographic Challenges: The Misleading Notion of a “Timebomb”

The first aspect to grasp about the demographic challenges faced by countries like the UK and US is to avoid the term “demographic timebomb.” This phrase, though tempting given the ongoing decline in birth rates, is strongly opposed by demographers, who study population changes.

“Number one, I hate the phrase,” states Sarah Harper, professor of gerontology at the University of Oxford. She elaborates, “I do not think there is a demographic timebomb, it is part of the demographic transition. We knew this was going to happen, and happen across the 21st Century. So, it is not unexpected, and we should have been preparing for this for some time.”

The challenge is indeed substantial. In developed countries, maintaining or growing the population requires a birth rate of 2.1 children per woman, known as the “replacement rate.” However, recent data shows a stark decline: in England and Wales, the total fertility rate fell to 1.49 children per woman in 2022 from 1.55 in 2021. This decline has been ongoing since 2010 and is mirrored in Scotland and Northern Ireland. Similarly, the US saw its fertility rate drop to a record low of 1.62 last year, a significant decrease from 3.65 in 1960.

“Two thirds of the world’s countries now have childbirth rates below the replacement rate,” adds Prof Harper. “Japan is low, China is low, South Korea is the lowest in the world.” Population growth is now primarily confined to sub-Saharan Africa.

The concern over declining birth rates stems from the economic issues they can trigger. Aging and shrinking populations result in a reduced workforce, which struggles to support a growing number of retirees. This raises pressing questions for government economists: how will economic growth be sustained if companies can’t find enough workers? How can a smaller workforce fund pensions for a larger retired population?

To counteract declining birth rates, nations can facilitate childbearing through enhanced childcare support, such as tax incentives and extended, fully-paid maternity leave. Companies could also offer flexible working hours and workplace childcare facilities. However, these measures may only slow the decline rather than reverse it.

The core issue is that as women’s education and workforce participation increase, their quality of life improves, leading them to prioritize their careers and financial stability over having more children. Consequently, they often opt for fewer children or none at all.

Countries facing declining birth rates have two primary strategies: extending the working life of the population or increasing immigration. Singapore, one of the fastest-aging countries, is pursuing the first option. “There is a lot of effort being put into raising the retirement age, training in middle life, and encouraging companies—which have to offer you re-employment up to the age of 69—to hire older workers,” says Prof Angelique Chan, executive director of Singapore’s Centre for Ageing Research & Education. Currently, Singapore’s retirement age is 63, set to rise to 64 by 2026 and 65 by 2030, with re-employment options extending to 70.

The Singaporean government is also enhancing healthcare to ensure older citizens can remain in the workforce. Prof Chan highlights, “Singapore is spending a huge amount of money so we have the healthiest kind of population, giving people the opportunity to work [in their old age].”

In the US, many elderly individuals are working to cover their living expenses. Ronald Lee, emeritus professor of economics at the University of California, notes, “If we look at the proportion of consumption of 65-year-olds and older in the USA that is funded by continuing to work, it is significantly higher than in other developed countries.” He argues this is not necessarily negative, suggesting, “People are healthier, vigorous, cognitively sharper, and ready to go on at much older ages than used to be the case. I hope to see retirement ages rising well into the 70s.”

Currently, Americans receive a full social security pension at 66 years and two months, gradually rising to 67. Prof Lee’s viewpoint, though potentially unpopular, reflects economic realities: as life expectancy increases, funding longer retirements becomes increasingly difficult, necessitating extended working years.

Alternatively, increased immigration could address falling birth rates, though this remains politically contentious. “Migration could easily solve the problem of lower birth rates from a demographic point of view,” says Prof Harper. “There are political and policy issues, but demographically what we should be doing is allowing those countries with huge child-bearing rates, and with huge numbers of workers for maybe the next four decades, to be able to flow across the world and make up the slack.”

Despite the potential of immigration to alleviate demographic challenges, it faces significant resistance. For instance, Hungary publicly adopts a zero-tolerance stance towards migrants. However, Elizabeth Kuiper, associate director of the European Policy Centre, notes, “We know that while these countries will not admit it publicly, in sectors like care and health care they have developed unspoken strategies for selective migration.”

The broader issue is that immigration levels in most developed nations are insufficient to compensate for aging populations, and the concept remains deeply unpopular. To address this, countries must find a balance between extending working lives and increasing immigration. Achieving this requires political consensus, yet advocating for increased immigration and extended working years is not typically popular with voters.

The demographic challenges facing countries like the UK and US are complex but not insurmountable. They necessitate a nuanced understanding and a multifaceted approach involving both policy reforms and societal shifts. The term “demographic timebomb” oversimplifies these challenges and overlooks the strategic adaptations necessary to navigate this demographic transition effectively.

Iranian President Ebrahim Raisi Killed in Helicopter Crash, Sparking Political Uncertainty

Iranian President Ebrahim Raisi died in a helicopter crash on May 19, 2024, in the mountainous region of Varzaqan in northwestern Iran. The crash, which also claimed the lives of other officials aboard, has sent shockwaves throughout Iran and the international community.

Raisi, who had a controversial career, was serving as Iran’s president since 2021. Before his presidency, he held significant positions within Iran’s judiciary, including the role of Chief Justice. Raisi was infamously known as the “Butcher of Tehran” for his involvement in the 1988 mass executions of political prisoners, a period during which he was part of a so-called “death committee” responsible for sending thousands to their deaths. This legacy had drawn severe criticism from human rights organizations globally, and he was under U.S. sanctions for his role in these human rights abuses.

His presidency was marked by an increase in Iran’s uranium enrichment activities, a cessation of international inspections, and strong support for Russia during the Ukraine conflict. Raisi’s government also played a significant role in regional conflicts, particularly in supporting groups like Hezbollah and the Houthis, and in the Gaza conflict against Israel.

Raisi’s death has left Iran at a political crossroads, with the constitution mandating a new presidential election within 50 days. This sudden power vacuum raises questions about the future direction of Iranian politics, especially concerning the balance between hardline and more moderate factions within the government. According to experts, the upcoming election will be a crucial indicator of the regime’s priorities and the political climate in Iran.

Reactions within Iran have been mixed. While official mourning was declared, there were also celebrations among segments of the population who viewed Raisi’s death as the end of an era marked by repression and strict enforcement of Islamic laws, particularly those affecting women’s rights. The brutal crackdown on protests following the death of Mahsa Amini in 2022, under Raisi’s orders, had left deep scars among many Iranians.

Internationally, Raisi’s death has implications for Iran’s foreign policy, particularly its interactions with Western countries and its involvement in regional conflicts. His leadership was characterized by a hardline stance against Western sanctions and a firm commitment to Iran’s nuclear program, which had escalated tensions with the U.S. and its allies.

President Ebrahim Raisi’s death in a helicopter crash is a significant event in Iranian and international politics. It opens up a period of uncertainty and potential change in Iran’s domestic and foreign policy directions, as the country prepares for a new presidential election and navigates the complex legacy left by Raisi’s tenure.

Shifting Economic Powerhouses: U.S. Resilience, China’s Rise, and Japan’s Decline from 1980 to 2024

Over the decades, the distribution of global GDP among the world’s largest economies has experienced dynamic shifts, reflecting changes in economic policies, technological advancements, and demographic trends.

To illustrate these changes, we visualized the world’s top six economies by their share of global GDP from 1980 to 2024.

U.S. Resilience

The United States’ share of global GDP has shown significant fluctuations over time. After reaching a low point of 21.1% in 2011, the U.S. economy rebounded, increasing its share by several percentage points. The IMF estimates that by 2024, the U.S. will account for 26.3% of global GDP.

This trend indicates that the U.S. has managed a robust recovery from the COVID-19 pandemic, as evidenced by its rising share of global GDP since 2020. In contrast, China, the EU, and Japan have seen their relative shares decline during the same period.

China’s Incredible Rise

The chart highlights China’s period of rapid economic growth, which began in the early 2000s. A significant milestone was China joining the World Trade Organization (WTO) in 2001, which facilitated its integration into the global economy.

Japan Falls From the #2 Spot

Japan was once the world’s second-largest economy after the U.S., accounting for 17.8% of the global economy in 1994 and 1995. However, economic stagnation and an aging population have led to a relative decline in Japan’s economic influence.

India Leads Global Remittances, Surpasses $100 Billion Mark: UN Report

India Leads Global Remittances, Surpassing $100 Billion Mark

India emerged as the global leader in remittances in 2022, surpassing the unprecedented $100 billion milestone, as reported by the United Nations migration agency. The International Organization for Migration (IOM), in its World Migration Report 2024, unveiled India’s remarkable achievement, alongside insights into the broader landscape of international migration.

According to the report, India, Mexico, China, the Philippines, and France stood out as the top recipients of remittances in 2022. India’s towering figure of over $111 billion marked a historic feat, solidifying its position as the foremost beneficiary. Notably, Mexico secured the second spot, a position it has maintained since 2021, overtaking China, which historically held the second-largest recipient status after India.

The report traces India’s journey as a remittance powerhouse, highlighting its consistent dominance over the years. India had previously topped remittance receipts in 2010, 2015, and 2020, with figures steadily climbing to culminate in the record-breaking $111.22 billion in 2022. This trend underscores the crucial role of Southern Asia as a significant hub for migrant workers, with India, Pakistan, and Bangladesh ranking among the top ten global recipients of remittances.

While celebrating India’s milestone, the report sheds light on the challenges faced by migrant workers from the region. Despite being a lifeline for many, remittances often come with risks such as financial exploitation, excessive debt due to migration costs, xenophobia, and workplace abuses. These issues underscore the importance of safeguarding the rights and well-being of migrant workers, especially in Gulf Cooperation Council (GCC) states, which continue to rely heavily on migrant labor.

The report emphasizes the profound impact of the COVID-19 pandemic on international migration patterns, particularly affecting low-skilled and undocumented workers. Loss of jobs, wage theft, and lack of social security have exacerbated vulnerabilities among Indian migrants, plunging many into debt and insecurity. Furthermore, the pandemic has reshaped labor dynamics, leading to a significant decline in urban migration and a surge in reverse internal migration.

Beyond remittances, the report delves into the broader landscape of international migration, highlighting key trends and challenges. It underscores the importance of Asia as a major source of internationally mobile students, with China leading in outbound student mobility. Meanwhile, countries like the US, the UK, Australia, Germany, and Canada remain prominent destinations for international students, shaping global education flows.

The report also addresses the evolving dynamics of irregular migration, particularly at the United States-Mexico border. While traditional source countries like Mexico and Central American nations continue to contribute to irregular migration, there has been a notable shift in origin countries, with increased arrivals from Venezuela, Cuba, Nicaragua, Haiti, Brazil, India, and Ukraine. This shift is attributed to various factors, including policy changes like Title 42, aimed at curbing the spread of COVID-19.

The World Migration Report 2024 offers a comprehensive overview of the complex landscape of international migration, with India’s remarkable remittance achievement serving as a focal point. As the global community grapples with the challenges and opportunities of migration, ensuring the rights and well-being of migrant workers remains paramount in shaping a more inclusive and sustainable future.

Concerns Mount as US Pandemic Savings Deplete, Buffett Warns of AI Risks, and Boeing Faces Inspection Probe

Americans managed to accumulate a substantial amount of savings during the pandemic, totaling a whopping $2.1 trillion. This surplus of funds provided a safety net, allowing consumers to maintain their spending habits even as interest rates climbed and inflation persisted. However, with this financial cushion now depleted, economists are expressing concerns about the future economic landscape.

The latest assessments of excess pandemic savings in the US economy have taken a worrying turn, with estimates indicating a negative balance. Economists Hamza Abdelrahman and Luiz Edgard Oliveira from the San Francisco Federal Reserve highlighted this shift, suggesting that as of March 2024, many Americans have more debt than savings. This depletion of pandemic-era savings could have detrimental effects on consumer spending, a vital driver of economic growth in the United States.

Furthermore, there’s a troubling trend of mounting debt. Austan Goolsbee, President of the Chicago Federal Reserve, expressed apprehension about the increasing rate of consumer delinquencies, signaling potential economic downturns. The recent performance of the US economy reflects these concerns, with first-quarter real GDP growth falling short of expectations, prompting analysts to revise their growth forecasts downward.

Retailers are feeling the pinch as well, as consumers are showing reluctance to spend as freely as before. To counteract this, many retailers have resorted to price cuts in an attempt to lure customers back into stores. Sarah Wyeth, managing director of retail and consumer at S&P Global Ratings, noted a year-long trend of decreased consumer spending, attributed to rising costs and stagnant incomes.

Earnings calls from major corporations further underscore the challenges facing the economy. Companies like Tyson Foods and Starbucks have reported declines in sales, citing inflation and changing consumer behaviors. McDonald’s CEO highlighted consumers’ cautious spending habits in the face of elevated prices, indicating broader industry pressure.

While excess savings from 2020 and 2021 provided a temporary boost to the economy, economists Abdelrahman and Oliveira emphasize that it was just one factor among many sustaining consumer spending. They point to the strength of the US labor market as another crucial element, suggesting that continued robust employment could help mitigate the impact of depleted savings.

Looking ahead, investors are eagerly awaiting reports from major companies like Disney, Airbnb, and Uber, hoping for insights into how consumer spending patterns are shaping revenue forecasts for 2024.

In a separate development, Warren Buffett, the chairman and CEO of Berkshire Hathaway, raised concerns about the rise of artificial intelligence (AI) during his annual shareholder meeting. Drawing parallels to the dangers of nuclear weapons, Buffett warned of the potential risks associated with AI technology, particularly the proliferation of convincing deep fakes used for scams.

Buffett’s cautionary remarks come amid the rapid integration of AI into various industries, with nearly 40% of global employment at risk of disruption according to the International Monetary Fund. While acknowledging AI’s potential for positive impact, Buffett remains apprehensive about its unknown consequences.

Berkshire Hathaway itself has begun utilizing AI to improve operational efficiency, although specifics about its implementation remain scarce. Buffett’s designated successor, Greg Abel, emphasized the need to balance labor displacement with new opportunities created by AI.

Meanwhile, Boeing faces scrutiny over potential quality inspection lapses on its 787 Dreamliner jets. The Federal Aviation Administration (FAA) is investigating whether Boeing employees neglected required inspections and falsified aircraft records. Boeing has initiated internal inspections and corrective measures in response to the investigation, with company executives affirming that the issue does not pose an immediate safety risk.

Google Layoffs Shift Hundreds of Jobs Overseas, Amplifying Concerns for American Workers Amid Global Economic Shifts

U.S. Google recently implemented significant layoffs, affecting more than 200 ‘core’ employees, with plans to relocate these positions to foreign countries as part of cost-cutting measures. The job positions from Google’s U.S. headquarters are slated to move to Mexico and India, a BRICS nation. This move follows a trend of outsourcing jobs from the U.S. to developing countries that began in the 1990s due to the availability of similar talent at lower wage costs.

The outsourcing of American jobs, particularly in the technology sector, has escalated since the early 2000s, with Mexico and India emerging as key destinations for such endeavors. Google’s recent layoffs coincide with a broader pattern of job cuts in the U.S. following the COVID-19 lockdowns, disproportionately impacting American workers.

India, as a BRICS member, offers a vast pool of talent in various fields, including technology and software development, often at salaries significantly lower than those paid in the U.S. Consequently, while Google and similar companies benefit from cost savings, American employees bear the brunt of outsourcing.

This shift in employment practices by Google comes at a time when BRICS nations are actively leveraging their talent pools to drive economic growth. However, while companies like Google prioritize profits and seek cheaper labor, the implications extend beyond corporate interests, affecting the livelihoods of U.S. workers.

Mexico’s potential inclusion in BRICS reflects broader global economic shifts, including efforts to reduce reliance on the U.S. dollar. Despite these geopolitical changes, American workers facing job displacement due to outsourcing find themselves without significant government assistance.

The situation underscores the challenges faced by U.S. workers in an increasingly globalized economy, where job opportunities in sectors like technology are dwindling while the financial industry experiences growth. As businesses pursue strategies aimed at maximizing profits, the consequences for American workers remain a pressing concern, with no clear solution in sight.

Americans Remain Concerned About Inflation: Gallup Survey Reveals Financial Worries

In the latest survey unveiled on Thursday, inflation maintains its prominent position as a foremost concern among Americans regarding their financial challenges.

Gallup’s findings reveal that 41 percent of Americans pinpoint inflation or a high cost of living as “the most important financial problem facing” their families, surpassing concerns such as taxes and energy expenses. This marks the third consecutive year where inflation has led the list, showcasing a marginal uptick from the previous year’s 35 percent, as per the survey.

The report from Gallup researchers emphasizes the significance of inflation as a domestic worry, standing just behind immigration, government affairs, and the broader economy when Americans identify the paramount issues confronting the nation.

Despite a robust labor market and a notable increase in inflation, the Federal Reserve opted to uphold interest rates at a 23-year peak.

Data disclosed by the Commerce Department last week underscores a rise in inflation for March, attributed to escalated spending and augmented incomes. The personal consumption expenditures price index, a preferred gauge of inflation by the Fed, exhibited a 0.3 percent surge in March and a 2.7 percent increment over the preceding year.

Additionally, the survey divulges a minor decline in individuals who perceive their overall financial situation as deteriorating, dropping from 50 percent to 47 percent compared to the previous year. Conversely, the proportion of those expressing an improvement in their financial circumstances rose from 37 percent to 43 percent in comparison to last year.

The poll highlights other significant financial concerns, including excessive debt (8 percent), healthcare expenses (7 percent), insufficient income or low wages (7 percent), and energy costs or gasoline prices (6 percent).

Examining responses by age, older adults manifest a greater tendency to identify inflation as a primary impediment to their financial well-being. Notably, 46 percent of adults aged 50 or above cited inflation, contrasting with 36 percent among those under 50.

Furthermore, individuals with higher incomes exhibit a heightened propensity to perceive inflation as a financial burden, according to the survey’s findings.

The Gallup poll, conducted from April 1-22 with a sample size of 1,001 individuals, carries a margin of error of 4 percentage points.

India’s Economic Odyssey: Modinomics’ Decade of Progress and Perils

In January, despite the bone-chilling cold, a multitude gathered at Delhi’s Red Fort to hear Prime Minister Narendra Modi’s address. His message, encapsulated in the catchphrase “Viksit Bharat 2047,” outlines an ambitious vision to elevate India to the status of a developed nation by 2047. This mantra reflects Modi’s penchant for crafting memorable slogans. While “Developed India” might seem like a broad pledge, Modi, during his ten-year tenure since assuming power, has diligently worked to lay the groundwork for an economic resurgence.

Upon inheriting an economy teetering on the brink, characterized by sluggish growth and faltering investor confidence, Modi faced significant challenges. The legacy of bankruptcies among Indian billionaires burdened banks with massive unpaid loans, constraining their lending capacity. However, after a decade, India’s economic trajectory has shifted positively, outpacing other major economies. Despite the challenges posed by the pandemic, India’s growth has remained robust, its banking sector fortified, and government finances stabilized. Last year, India ascended to become the fifth largest economy globally, and analysts project a rise to the third spot by 2027, surpassing Japan and Germany.

India’s recent achievements have fostered a sense of optimism nationwide. Hosting the G20 summit, pioneering lunar exploration, and nurturing numerous unicorn startups underscore the nation’s progress. Moreover, the buoyant stock markets have augmented the wealth of the middle class, contributing to this optimism.

However, a deeper analysis reveals a more nuanced reality. While “Modinomics,” the economic vision of the ruling Bharatiya Janata Party (BJP), appears effective on the surface, substantial segments of India’s vast population still grapple with economic hardship. Despite strides in digital governance, which have revolutionized access to services for marginalized communities, substantial disparities persist.

The transformative impact of Modi’s infrastructure initiatives is evident in the proliferation of construction projects across India, symbolized by the sleek underwater metro in Kolkata. Over the past three years, infrastructure spending has exceeded $100 billion annually, significantly enhancing the nation’s public facilities. Additionally, bureaucratic hurdles have been alleviated, a longstanding impediment to India’s economic growth.

However, Modi’s policies have not uniformly benefited all sectors of society. The stringent lockdown measures during the pandemic, coupled with the ramifications of the 2016 cash ban and the flawed implementation of a new goods and services tax, have precipitated enduring structural challenges. The informal sector, comprising small enterprises vital to India’s economy, continues to grapple with the repercussions of these decisions. Furthermore, private sector investment remains subdued, diminishing as a proportion of GDP over the years.

The dire employment situation underscores the persistence of economic challenges. The influx of job seekers at government recruitment centers highlights the severity of India’s jobs crisis, exacerbating widespread disillusionment. Despite educational achievements, many youths, like Rukaiya Bepari, struggle to secure stable employment opportunities, reflecting the widening gap between skills and job availability.

Moreover, India’s manufacturing sector’s sluggish growth and the enduring dominance of agriculture underscore persistent structural challenges. The lack of substantial industrial development perpetuates reliance on agriculture, a sector increasingly beset by profitability concerns.

India’s economic growth post-pandemic has been characterized by unevenness, with the affluent prospering while the marginalized endure hardship. Despite ranking as the fifth largest global economy, India lags significantly in per capita terms, with inequality reaching historic highs. The ostentatious displays of wealth among the elite stand in stark contrast to the financial struggles faced by many.

Nevertheless, despite these challenges, experts remain optimistic about India’s economic prospects. Drawing parallels with China’s rapid growth trajectory in the early 21st century, analysts foresee India’s ascendance driven by demographic advantages, geopolitical shifts, and technological advancements. Infrastructure investments, combined with a focus on human capital development, are seen as critical for sustaining long-term growth.

While Modi’s economic policies have yielded tangible benefits for some, significant segments of society continue to grapple with economic insecurity. As India embarks on its next phase of development, addressing systemic inequalities and prioritizing inclusive growth will be imperative to ensure a prosperous future for all citizens.

Key themes at the IMF/World Bank Spring Meetings: Dollar dominance

  • The U.S. dollar has risen a stunning 30% over the past decade.
  • You would think—given this rise—consensus would be dollar-bearish, but last week’s meetings were the most dollar-bullish in a very long time.
  • There was lots of focus on cyclical outperformance of the U.S. economy, with that outperformance keeping U.S. inflation stickier than elsewhere, forcing the Fed to stay on hold even as other central banks start to cut.
  • U.S. elections and geopolitics were seen as adding to dollar strength.
  • Option-implied volatilities in currency markets are unusually low, which means that market volatility may rise in the rest of 2024

Half a year ago, debate at the IMF/World Bank annual meetings in Marrakech centered on geopolitics, with a lot of concern that the global security situation was spinning out of control. This was not the central theme at last week’s IMF/World Bank Spring Meetings. To be sure, there was lots of debate on the Middle East and Ukraine, but neither were seen as “systemic.” Instead, focus was on cyclical outperformance of the United States vis-à-vis its peers and the possibility that this might keep U.S. inflation stickier than elsewhere, preventing the Fed from cutting rates even as other major central banks begin easing cycles. This combination of factors made sentiment the most dollar-bullish in a very long time, with the U.S. election and geopolitical risk seen as additional sources of dollar strength. Not much of any of this is priced into markets. Option-implied volatilities for the euro and Mexican peso, for example, are at very depressed levels. This means volatility may rise, perhaps sharply, as the rest of 2024 unfolds.

US economic outperformance

A stylized fact following the 2008 crisis is that U.S. growth substantially outperformed the rest of the advanced world. This again looks to be true in the aftermath of COVID-19 (Figure 1), with lots of debate on the underlying drivers. Some argue that this outperformance reflects loose fiscal policy and rapid immigration, while others see a productivity boom linked to tight labor markets. Whatever the source, cyclical outperformance may keep U.S. inflation stickier than elsewhere. There are some signs of this. Figure 2 shows the combined weight of items in the U.S. consumer price index (CPI) with month-over-month inflation above 2% (on a seasonally adjusted, annualized basis), alongside the same measure for the eurozone’s harmonized index of consumer prices (HICP). This metric is noisier than if we used year-over-year inflation, but it has the advantage of focusing on recent inflation dynamics, since there are no base effects to muddy the picture. Elevated inflation remains relatively broad-based in the U.S., consistent with strong growth, while inflation momentum is clearly fading in the eurozone.

Figure 1. Real GDP vs. pre-COVID trend growth in the US and eurozone, indexed to 100 in Q4 2007

Source: BEA and Eurostat

Figure 2. Inflation generalization in the US and eurozone: Weight of items in CPI and HICP with m/m (saar) inflation > 2%

Source: BLS and Eurostat

Cyclical outperformance of the United States is not priced into markets. Figure 3 shows 5-year, 5-year forward breakeven inflation for the U.S. and eurozone. Prior to COVID-19, breakeven inflation in the eurozone was around 70 basis points below the U.S. That wedge has closed and is currently only half that, which means that markets are not differentiating sufficiently between the U.S. and the eurozone. The same picture emerges from interest rate differentials. Figure 4 shows 2-year, 2-year forward interest rates in the U.S. and eurozone—an estimate for where markets think the “terminal” rate will be—along with the corresponding rate differential. The rate differential is below where it was prior to COVID-19, even though the U.S. is now much more clearly outgrowing the eurozone. The fact that U.S. outperformance is not priced into markets suggests there is scope for the dollar to rise going forward, which explains bullish sentiment at last week’s Spring Meetings.

Figure 3. 5-year, 5-year forward inflation breakevens for the US and eurozone, in %

Source: Bloomberg

Figure 4. 2-year, 2 year forward interest rates in the US and eurozone, in %

Source: Bloomberg

While the charts so far have drawn the contrast with the eurozone, our basic points carry over to the broad dollar. Figure 5 shows the trade-weighted interest differential at different tenors of the U.S. vis-à-vis other advanced economies, where we use the same weights as the Federal Reserve’s dollar index. Much as in Figure 4, the rate differential of the U.S. versus key trading partners is below its peak in the run-up to COVID-19. Markets are not pricing U.S. “exceptionalism.” The same is true just looking at the trade-weighted nominal dollar versus advanced economies and emerging markets (Figure 6). The dollar has basically been in a decade-long holding pattern since its large rise in 2014/5.

Figure 5. US interest rate differentials vs. other advanced countries, in % (US – GDP weighted foreign)

Source: Bloomberg

Figure 6. US dollar vs. G10 and emerging markets, excluding China

Source: Bloomberg

US elections and geopolitical risk

The looming U.S. elections were—inevitably—a major discussion point, though there is little conviction on which way the election will go. What is clear, regardless of the outcome, is that markets have not yet begun to hedge this event risk in any material way, which is evident from meetings with investors and market pricing. Figure 7 shows option-implied volatility for EUR/$ on a six-month (does not cover the election) and one-year tenor (spans the election). Volatility spiked sharply in November 2016 and is currently far below those levels, even after the recent rise as markets priced a more hawkish Fed. Figure 8 shows the same thing for $/MXN, where it is again true that volatility rose sharply in November 2016 and is currently far below those levels. The fact that markets have not yet begun to hedge U.S. election risk is another source of dollar strength and volatility for the rest of 2024. An escalation of conflict in Ukraine or the Middle East would also prompt safe-haven flows to strengthen the dollar..

Figure 7. EUR/$ money option volatility

Source: Bloomberg

Figure 8. $/MXN money option volatility

Source: Bloomberg

Trudeau Pioneers Halal Mortgages for Muslim Homebuyers; Budget Proposes Ban on Foreign Investor Home Purchases

Trudeau’s Move to Introduce Halal Mortgages for Muslims

Prime Minister Justin Trudeau’s administration is embarking on a quest to expand access to various financing options, including halal mortgages, in a bid to support the homeownership aspirations of Canadians, particularly those in the Muslim community.

In the latest federal budget announcement, the Liberal government unveiled its engagement in dialogues with financial service providers and diverse communities, aiming to gain insights into how federal policies can better accommodate the varied requirements of Canadians in pursuit of owning homes.

The 2024 Canada Budget highlights this initiative, stating, “This could include changes in the tax treatment of these products or a new regulatory sandbox for financial service providers, while ensuring adequate consumer protections are in place.”

Understanding Halal Mortgages

Halal mortgages adhere to Islamic law, which prohibits the collection of interest, deeming it as usury. While other Abrahamic religions, such as Judaism and Christianity, also denounce usury, Islamic financial institutions offer mortgage and lending solutions that avoid conventional interest payments.

Despite some Canadian financial institutions offering Islamic law-compliant mortgages, none of the nation’s five major banks currently provide them. Analysts suggest that these alternative mortgages may not be entirely devoid of interest but could involve regular fees as alternatives to interest charges.

The proposal sparked a mixed response on social media, with some labeling it a ‘progressive notion’ designed to benefit a specific segment of society. “Religious financial products with different tax treatment? What?,” questioned Paul Mitchell.

Canada’s Ban on Foreign Investors Purchasing Homes

The federal budget introduced a two-year prohibition on foreign investors purchasing residential properties, effective from January 1, 2023. The government justifies this move as necessary to ensure available housing for Canadians and prevent residential properties from becoming merely speculative assets for foreign investors.

Expanding on this stance, the budget proposal outlines the government’s intention to extend the ban on foreign home purchases for an additional two years, until January 1, 2027. The document reiterates that foreign commercial entities and non-Canadian citizens or permanent residents remain barred from acquiring residential property in Canada.

Key Highlights from Canada’s Budget

Presented by Deputy Prime Minister and Finance Minister Chrystia Freeland, the housing-centric budget forecasts a deficit of $39.8 billion for the fiscal year 2024-25. This budget allocates $53 billion in fresh expenditure over the next five years, with a significant portion directed towards promoting intergenerational equity and aiding younger Canadians, specifically Millennials and Generation Z, through initiatives targeting renters and first-time homebuyers.

To partially balance the increased spending, the government introduces “tax fairness measures,” projected to yield an additional $18.2 billion in revenue over the following five years.

Major US Banks Witness Billions in Deposit Flight Amid Economic Uncertainty

Recent data reveals significant declines in deposits at two major US banks.

Citigroup’s quarterly earnings report indicates a decrease in deposits from $1.3305 trillion in Q1 of 2023 to $1.3072 trillion in Q1 of this year, marking a notable decline of $23.3 billion over the course of 12 months. Similarly, Wells Fargo experienced a drop of $15.1 billion in deposits during the same period, with figures slipping from $1.3567 trillion in Q1 2023 to $1.3416 trillion in Q1 2024.

JPMorgan Chase reported a 7% decrease in deposits within its Consumer & Community Banking division for Q1, excluding data from its majority acquisition of First Republic Bank, which has faced financial challenges. However, the overall deposits for the firm remained steady, excluding First Republic’s contribution.

Looking ahead, JPMorgan’s chief financial officer, Jeremy Barnum, anticipates stagnant or slightly declining deposit balances as consumers seek higher returns on their cash investments. He remarked, “We expect deposit balances to be sort of flat to modestly down. So that’s a little bit of a headwind at the margin… in a world where we’ve got something like $900 billion of deposits paying effectively zero, relatively small changes in the product-level reprice can change the NII run rate by a lot.”

Meanwhile, CEO Jamie Dimon of JPMorgan Chase issued a cautionary note, suggesting that US banks could face another crisis if the Federal Reserve opts to raise interest rates. In his annual shareholder letter, Dimon highlighted the vulnerability of banks and leveraged US firms to persistent inflationary pressures, warning of dire consequences if the Fed tightens monetary policies further.

Dimon referenced JPMorgan’s acquisition of First Republic in May 2023, following the collapse of two other regional banks, Silicon Valley Bank (SVB) and Signature Bank. He explained that the banking crisis seemed to be waning with the resolution of these three troubled banks, contingent upon stable interest rates and the absence of a severe recession.

However, Dimon underscored the potential risks associated with a significant increase in long-term interest rates, particularly if accompanied by an economic downturn. He emphasized the detrimental impact such a scenario could have on financial assets, citing a 2-percentage-point rise in rates as equivalent to a 20% reduction in asset values. Additionally, Dimon highlighted the vulnerability of certain real estate assets, particularly office properties, to the effects of recession-induced higher vacancies and widened credit spreads.

IMF and World Bank Reports: Global Economy Dodges Recession, But Disparities Widen Among Nations

The global economy has sidestepped the looming threat of a crippling recession, with the IMF revising its forecast for worldwide aggregate growth in 2024 to 3.2%, up from the previous 2.9% estimated in October. The IMF emphasized the remarkable resilience of the global economy, weathering various adverse shocks and “significant central bank interest rate increases aimed at restoring price stability,” with growth primarily driven by advanced economies, notably the U.S., bolstering demand. However, the IMF also highlighted a concerning trend of widening disparities between low-income developing countries and the rest of the world. According to the IMF, “A troubling development is the widening divergence between many low-income developing countries and the rest of the world. For these economies, growth is revised downward, whereas inflation is revised up.” These nations, primarily in Africa, Latin America, the Pacific islands, and Asia, have borne the brunt of the COVID-19 pandemic, experiencing substantial declines in output relative to pre-pandemic projections and facing challenges in recovery.

Additionally, these struggling economies are burdened with mounting debt service obligations, severely limiting their ability to invest in essential public goods such as education, healthcare, and social safety nets to enhance food security.

In a separate report, the World Bank, the IMF’s counterpart, highlighted a concerning trend whereby half of the world’s 75 poorest countries are experiencing a widening income gap with the wealthiest economies, marking a “historic reversal” in development. According to the World Bank Group’s Chief Economist Indermit Gill, these countries, home to a quarter of humanity, including 1.9 billion people, and 90% of those facing hunger or malnutrition, are grappling with what he terms potentially “a lost decade.” Gill lamented the lack of attention from the rest of the world, noting that many governments in these nations are paralyzed by debt distress.

Drawing attention to success stories like South Korea, China, and India, which transitioned from borrowers to economic powerhouses and now contribute to the International Development Association (IDA), the World Bank’s chief economist stressed the importance of financial support from wealthier nations to the poorest countries. He emphasized that global prosperity and peace require tapping into every reservoir of economic potential, underscoring the imperative of not turning away from a quarter of the world’s population.

The global economy has managed to evade the looming threat of a severe recession, as highlighted by the IMF’s recent adjustment of its 2024 worldwide aggregate growth forecast to 3.2%, up from the previous projection of 2.9% made in October. This positive revision underscores the remarkable resilience displayed by the global economy, which has weathered various adversities, including “significant central bank interest rate increases aimed at restoring price stability,” while largely sustaining its growth momentum. Notably, the growth has been primarily driven by advanced economies, with the United States taking the lead in bolstering demand.

Despite these encouraging signs, the IMF also sounded a note of caution regarding the widening gap between low-income developing countries and the rest of the world. According to the IMF, “A troubling development is the widening divergence between many low-income developing countries and the rest of the world. For these economies, growth is revised downward, whereas inflation is revised up.” This divergence is particularly concerning for nations in Africa, Latin America, the Pacific islands, and Asia, which have endured significant setbacks due to the COVID-19 pandemic and are currently grappling with the challenges of recovery.

Adding to their woes, these struggling economies are burdened by mounting debt obligations, severely limiting their capacity to invest in crucial public goods such as education, healthcare, and social safety nets aimed at improving food security.

In a separate report, the World Bank echoed these concerns, highlighting a troubling trend where half of the world’s 75 poorest countries are experiencing a widening income disparity with the wealthiest economies, marking a “historic reversal” in development. Chief Economist Indermit Gill emphasized the gravity of the situation, noting that these countries, home to a quarter of humanity and 90% of those facing hunger or malnutrition, are currently facing what he terms potentially “a lost decade.” Gill expressed disappointment at the lack of attention from the international community, pointing out that many governments in these nations are grappling with debt-related challenges.

Drawing attention to success stories such as South Korea, China, and India, which have transitioned from borrowers to economic powerhouses and are now contributing to the International Development Association (IDA), the World Bank’s chief economist stressed the importance of financial support from wealthier nations to the poorest countries. He emphasized that achieving global prosperity and peace necessitates leveraging every possible source of economic potential, underscoring the urgency of not ignoring a quarter of the world’s population.

Redefining Success: How Associate Degrees Are Paving the Way to Six-Figure Salaries

A conventional four-year bachelor’s degree is no longer the sole path to a lucrative six-figure income. In fact, it’s becoming less prevalent as a default requirement for many employers.

According to a recent article from Yahoo Finance, major companies like Google, IBM, Tesla, General Motors, Delta Airlines, and Apple are among those ditching the traditional college degree prerequisite in favor of skills-based recruitment. This shift presents promising opportunities for job seekers and those planning their career paths. It suggests that securing a well-paying job with a reputable employer is increasingly feasible without accumulating significant student debt, thanks to the growing emphasis on skills and workplace attitudes.

“The significance of a four-year degree is diminishing in today’s job market, paving the way for alternative routes to success,” the Yahoo Finance report underscores.

Emphasizing the importance of continuous improvement in soft skills and the acquisition of technical expertise, the report highlights the limitless potential for both income and career advancement.

But what exactly is an associate degree, and how does it fit into this evolving landscape?

An associate degree, typically spanning two years (though sometimes three), serves as an undergraduate qualification that can precede a bachelor’s degree. It provides foundational knowledge in a chosen field, either as a standalone qualification or as a stepping stone toward further education.

In regions like the UK, equivalents to the associate degree include the Higher National Certificate, Higher National Diploma, or foundation degree.

While not all associate degrees offer equal financial prospects upon graduation, there are three particular fields where significant earning potential exists, even rivaling six-figure salaries, all without the need for a bachelor’s degree or advanced education.

  1. Associate Degree in Nursing

An associate degree in nursing serves as the gateway to a career as a registered nurse. With top earners in the 90th percentile commanding annual salaries as high as $129,400, it’s evident that nursing can be financially rewarding. Location plays a significant role in income disparities, with California boasting the highest salaries for nurses, with the top 10% earning over $177,000 annually.

Average Salary Range: $62,640 – $112,360

  1. Associate Degree in Construction Management

The demand for construction managers is on the rise, outpacing average job growth rates through 2032. Holding an associate degree in construction management opens doors to onsite roles, where advancement through on-the-job training and specialized certifications can substantially increase earnings. Years of experience in the field also contribute to salary growth.

Average Salary Range: $114,862 – $151,536

  1. Associate Degree in Nuclear Technology

Despite not being among the most popular career paths, a role as a nuclear technician offers considerable earning potential. These professionals play a critical role in safety and energy generation, operating and maintaining equipment used in scientific experiments and nuclear power plants. Their responsibilities include warning others about hazardous conditions and radiation exposure.

Average Salary Range: $72,040 – $105,125

While earning over $100,000 with just an associate degree may seem unconventional, these roles make it entirely feasible. By leveraging location advantages and committing to gaining experience and additional certifications, individuals can achieve substantial incomes while avoiding significant student debt.

Unlocking Potential: Bridging the Gap Between Workers’ Aspirations and Employers’ Perceptions

Bosses are increasingly in pursuit of more skilled workers, while workers themselves crave more opportunities for skill development. This paradoxical situation has left neither party satisfied. According to the most recent annual Career Optimism Index study conducted by the University of Phoenix Career Institute, more than half of the 5,000 U.S. workers surveyed expressed feelings of being easily replaceable in their workplace. Additionally, almost two-thirds of respondents lamented the lack of advancement opportunities within their companies. This sentiment was further compounded by approximately a third of workers who felt their contributions were not adequately recognized by company leadership, resulting in feelings of disempowerment and decreased productivity.

In the current competitive talent market and amidst persistently high inflation rates, companies are striving to cut costs. Consequently, they are increasingly focusing on external resources to drive growth, as stated by John Woods, the provost and chief academic officer at the University of Phoenix, in the report. This fixation perpetuates what Woods refers to as “a stagnant talent environment.” However, there exists a substantial disparity between how companies perceive their workforce and how workers perceive themselves.

Nearly half of the bosses surveyed, totaling over 500, claimed difficulty in finding skilled new hires due to a lack of qualified applicants in the past year. This discrepancy underscores a clear communication gap. The report emphasizes the importance of offering clearer and more flexible advancement opportunities internally to develop the necessary talent from within. This approach aligns with both business objectives and workers’ career aspirations.

The latest Index from the University of Phoenix, now in its fourth iteration, suggests that many business leaders underestimate the untapped potential within their existing workforce. According to Woods, these workers harbor a significant desire to progress and acquire the skill sets sought by employers to fortify their businesses for the future.

However, bosses may not fully recognize this potential. While over 60% of employers believe their companies provide ample growth prospects for their current workforce, only slightly more than a third of workers share this sentiment. This disparity serves as a wake-up call for employers, as the majority of workers acknowledge the need for a broader skill set to stay competitive and appreciate any support in gaining those skills. Yet, instead of investing in their current staff, companies often seek external hires with pre-existing skills, leaving their employees feeling stagnant.

The feeling of stagnation poses a more significant threat to the bottom line than merely addressing a skills gap. Without opportunities for advancement, workers are twice as likely to seek employment elsewhere. It is well-documented that replacing outgoing employees is both costly and time-consuming.

Moreover, the issue of feeling undervalued exacerbates the situation. Years of layoffs, strikes, and economic uncertainties have left many workers anxious. A significant portion worry about job security in a weak economy, while others note that their salaries have failed to keep pace with inflation, leading to a decline in their purchasing power. This economic strain has compelled many to forgo expenses they could afford just two years ago.

However, despite these challenges, there remains a sense of optimism among the workforce. Nearly 80% of Americans maintain hope regarding their career prospects, with a similar percentage feeling in control of their future. Conversely, corporations face a more daunting outlook. Failure to invest in nurturing existing talent could result in missing out on cumulative savings of up to $1.35 trillion, estimates from the University of Phoenix suggest.

The cost of neglecting internal talent development far exceeds that of investing in external resources. Therefore, it is imperative for companies to recognize and address the aspirations of their workforce, offering them the necessary opportunities for growth and advancement within the organization.

Exploring India’s Economic Schism: A Journey with Amina from Poverty to Opulence

Close to the area I once called home lies one of India’s most dazzling shopping centers. During the day, the immense structure overshadows everything in its vicinity. At night, a dazzling array of lights starkly contrasts with the neighboring shops and houses, which have taken on a worn appearance from pollution and rain.

Within this grand establishment named Quest, residents of Kolkata with substantial disposable incomes indulge in luxury foreign brands like Gucci and dine at Michelin-starred restaurants.

However, life outside continues at a steady pace for individuals like my acquaintance, Amina.

She resides in a slum nestled in the shadow of Quest.

Amina embodies a statistic often mentioned yet rarely acknowledged: Approximately 60% of India’s nearly 1.3 billion inhabitants subsist on less than $3.10 per day, according to the World Bank’s median poverty line. Moreover, over 250 million people, constituting 21% of the population, survive on less than $2 per day.

Growing up as a middle-class Indian, I had limited exposure to the lives of the underprivileged. We inhabited distinct spheres, a divide that seemed to widen as India surged forward as a global economic force. While the affluent prospered, the impoverished largely remained in their dire circumstances, contributing to the expanding gap.

Presently, the wealthiest 10% in India command 80% of the nation’s wealth, as reported by Oxfam in 2017. Furthermore, the top 1% possesses 58% of the country’s wealth, in stark contrast to the United States, where the richest 1% owns 37% of the wealth.

Another illuminating perspective reveals that the wealth of 16 individuals in India equates to that of 600 million people.

These eye-opening statistics about my homeland evoke a sense of dichotomy. One facet of India showcases billionaires, technological advancements, nuclear capabilities, and democratic values. Conversely, there exists another India, inhabited by individuals like Amina, where nearly 75% of the population resides in villages, engaged in arduous labor; only 11% own refrigerators, and 35% lack basic literacy skills.

I am meeting Amina today because policymakers and journalists seldom engage with individuals like her to assess India’s progress. Quest Mall in Kolkata symbolizes India’s economic triumph, and I am curious to hear Amina’s perspective on it.

Amina and I go way back to 1998 when she began working at my parents’ residence. Each morning, she would trek from her dwelling about a mile and a half away, arriving around 10 AM to tend to household chores. Despite her age, which she claimed to be around 50 despite lacking any documentation, she exhibited remarkable resilience from years of domestic labor.

My mother held Amina in high regard, and even after my parents passed away in 2001 and I sold the flat, I made a point to visit Amina whenever I returned to Kolkata.

Over time, I learned about the challenges she faced, particularly after her husband’s passing, which left her struggling to secure steady employment due to her declining health. Despite my attempts to assist her financially, Amina insisted on earning her keep by offering services like massages or pedicures.

My frequent visits to India stem not only from my distinct upbringing but also from a deep fascination with the country’s evolution from a poverty-stricken former colony to a formidable global player.

I am mindful that Western perceptions of India often revolve around clichés such as corruption, traffic accidents, pollution, arranged marriages, and vibrant festivals. However, India’s societal landscape has evolved significantly, characterized by a burgeoning youth population, a surge in urban obesity rates, and the transformation of traditional trades due to the proliferation of the IT sector.

Such transformations necessitate constant reacquaintance with my birthplace.

Today, I am eager to reconnect with Amina and assess her well-being since our last encounter. Navigating through dim, labyrinthine alleys, I reach Amina’s modest dwelling. The air is thick with the aroma of cooking spices mingling with the acrid scent of coal-burning stoves.

Amina’s living conditions, reminiscent of those depicted in Katherine Boo’s “Beyond the Beautiful Forevers,” epitomize the struggles faced by individuals like her. Amidst scratched aluminum pots and an antiquated television set, Amina resides in a dimly lit room devoid of windows, paying a monthly rent equivalent to what she once earned at my parents’ residence.

Her room serves as a shared space for her and her grandchildren, offering a glimpse into the harsh realities endured by marginalized communities.

Economists like Devinder Sharma advocate for an alternative approach to India’s development, urging policymakers to address the systemic inequalities perpetuated by existing tax structures and government incentives that primarily benefit the affluent.

Conversely, Indian entrepreneurs attribute the widening wealth gap to systemic issues such as government corruption and inefficiency. Factors like gender, caste, and geographic location further exacerbate disparities, as highlighted by economic development expert Raj Desai.

As I engage with Amina in her humble abode, I am struck by her physical frailty, a stark contrast to her once robust demeanor. Despite her diminished mobility, Amina’s resilience remains evident as she eagerly anticipates our outing.

Accompanied by her granddaughter, Manisha, Amina ventures into an unfamiliar realm as we arrive at Quest Mall, where the dichotomy between old and new becomes palpable.

Outside the opulent mall, street vendors like Tapan Datta continue their daily routines, unfazed by the extravagant offerings within. However, our attempt to enter the mall is met with resistance from a vigilant security guard, underscoring the exclusivity of such establishments.

Inside, Amina’s astonishment at the immaculate surroundings is evident, offering a glimpse into a world previously beyond her reach. As we explore the mall, I observe the incongruity between the exorbitant price tags and Amina’s meager means, highlighting the stark disparities perpetuated by India’s economic growth.

While Amina’s inability to comprehend the astronomical prices provides a sense of relief, it also serves as a poignant reminder of the insurmountable barriers faced by individuals like her.

As we reflect on our experience, Amina’s poignant words resonate deeply, encapsulating the profound sense of resignation prevalent among marginalized communities.

Amidst academic discourse and policy debates surrounding India’s economic trajectory, Amina’s plight serves as a poignant reminder of the inherent inequities perpetuated by systemic injustices.

Despite the ongoing discourse regarding India’s economic future, the fundamental question of how to alleviate widespread poverty remains unanswered. While some advocate for progressive policies aimed at redistributing wealth, others emphasize the importance of addressing systemic issues such as education and healthcare.

As I bid farewell to Amina, her poignant words linger, serving as a testament to the enduring resilience of individuals like her amidst formidable challenges. In her world, devoid of the prospect of upward mobility, the American dream remains an elusive notion.

As I depart, I am reminded of the stark juxtaposition between luxury and deprivation, a sobering reality that underscores the urgent need for inclusive economic reforms aimed at uplifting the most vulnerable segments of society.

Report Reveals $180 Billion Green Hydrogen Market Potential in Asia’s Industrial Giants by 2050

A new study conducted by the High-level Policy Commission on Getting Asia to Net Zero, convened by the Asia Society Policy Institute, highlights the significant potential for green hydrogen (H2) electrolyzers in Asia’s four largest economies. Titled “Green Hydrogen for Decarbonizing Asia’s Industrial Giants,” the report examines the role of electrolyzers in meeting the growing demand for green H2 in China, India, Japan, and South Korea. Conducted by Global Efficiency Intelligence, the study focuses on three key industries—steel, ammonia, and methanol—and explores various decarbonization scenarios.

The report projects substantial market growth for green H2 electrolyzers in these countries by 2050, particularly if they adhere to their net zero targets. The estimated market potential for the three industries by 2050 is as follows:

– China: $85 billion (up from $22 billion in 2030)

– India: $78 billion (up from $4 billion in 2030)

– Japan: $9 billion (up from $1 billion in 2030)

– South Korea: $8 billion (up from $1 billion in 2030)

This collective market potential is expected to reach $180 billion by 2050, with a compound annual growth rate (CAGR) as high as 12% between 2030 and 2040—nearly five times the market potential under a business-as-usual scenario.

The report emphasizes that the total electrolyzer market opportunity extends beyond these industries and provides a breakdown of the potential market for each industry and country analyzed.

To accelerate the development and adoption of green H2 and electrolyzer manufacturing, the report offers a set of policy recommendations. These recommendations target policymakers, industry stakeholders, investors, and think tanks, aiming to establish a robust ecosystem for green H2 production and use in pursuit of net zero emissions.

The report’s launch event took place on April 12 in New Delhi, India, where Ali Hasanbeigi, Founder, CEO, and Research Director at Global Efficiency Intelligence, highlighted the importance of utilizing green H2 in key sectors like steelmaking, ammonia, and methanol to achieve decarbonization. Hasanbeigi stressed the massive potential for electrolyzers in major Asian countries and the substantial benefits for those who seize this opportunity.

Kate Logan, Associate Director of Climate at the Asia Society Policy Institute, emphasized that ambitious net zero targets can drive demand for critical technologies like electrolyzers, essential for decarbonizing the region and the world. She suggested that Asia’s industrial giants view net zero pathways as opportunities for development rather than limitations.

Amitabh Kant, India’s G20 Sherpa, commended the release of the report, highlighting the need to transform sectors like steel and fertilizers to achieve India’s energy independence and net zero goals. Kant acknowledged India’s potential to produce green hydrogen for both domestic use and global markets, leveraging its abundant renewable energy resources.

Charith Konda, Energy Specialist at the Institute for Energy Economics and Financial Analysis, emphasized India’s significant growth potential in the green hydrogen electrolyzer market. He noted a projected CAGR of 16%, signaling positive prospects for investors and policymakers and underlining the strategic role of green hydrogen in achieving net zero objectives.

The High-level Policy Commission on Getting Asia to Net Zero, launched in May 2022, aims to accelerate Asia’s transition to net zero emissions while ensuring economic prosperity. Through research, analysis, and engagement, the Commission, with the Asia Society Policy Institute serving as the secretariat, seeks to advance a coherent and Paris-aligned vision for net zero emissions in the region. More information about the commission is available at AsiaSociety.org/netzero.

California Homeowners Slash Property Prices Amid Market Shift: 40% Reductions Seen in Oakland and Beyond

In regions of California, homeowners are significantly reducing property prices, some by up to 40%, departing from the meteoric home appreciation witnessed during the pandemic era.

For instance, a five-bedroom residence in Oakland, California, initially listed for $4.1 million in March 2022, has resurfaced on real estate platform Redfin for $2,550,000 following a price cut exceeding 40%.

Realtor Matt Castillo expressed surprise upon spotting the listing, commenting on X (previously Twitter), “This house was sold in Oakland in March 2022 for 4.1M. Now it has been on the market [for] over 60 days and just had a price cut from 3M to 2.55M.”

Castillo speculated on the circumstances, suggesting the buyer may have been swayed by the fervent market (before interest rate hikes), paying $1.1 million over the asking price. He noted, “Now Oakland is having a moment and interest rates are high.”

Oakland is grappling with a challenging period, witnessing the closure of numerous major retailers and grappling with increased incidents of retail theft and other crimes, posing threats to the safety of both customers and staff.

Property tax for the aforementioned home surged drastically over the past couple of years, escalating by 125.3% between 2022 and 2023, escalating from $26,319 to $59,307.

This reduction in home prices is not an isolated incident but indicative of the broader area’s trend. Journalist Lance Lambert reported on X that home prices in Oakland’s 94610 ZIP code have dropped by 16.7% from their 2022 peak.

Despite Southern California’s resurgence in prices, most of Northern California, including San Francisco and Oakland, is still struggling due to the tech sector’s recent challenges, particularly in adapting to advancements in artificial intelligence (AI).

Several ZIP codes experienced significant price drops between February 2023 and 2024, including 96041, Hayfork (-16.1%); 95526, Bridgeville (-18.7%); 95528, Carlotta (-15.6%); 95542, Redway (-16.1%); 95428, Covelo (-15.1%); 95454, Laytonville (-15.5%); 92347, Hinkley (-20.4%); 92242, Earp (-20.9%).

Despite recent adjustments, California’s home prices, including those in Oakland, remain historically elevated. As of February 29, the average home value in California stood at $765,197, a 5.4% increase over the past year, significantly higher than the national average of $347,716.

Even though there was a modest decline during the correction in late summer 2022 and spring 2023, California’s home prices are nearly as high as they were at their peak in July 2022, averaging $769,345.

The resurgence in home prices is primarily attributed to California’s enduring historic supply shortage, exacerbated by stringent regulations hindering new property construction, as explained by Moody’s Analytics housing economist Matthew Walsh.

Despite the recent price reduction, the five-bedroom Oakland home remains priced at 45.7% above its November 2020 sale price of $1.75 million.

Gold Prices Surge to Record High Amidst Geopolitical Tensions and Fed Rate Cut Signals

Gold prices surged to a fresh all-time peak of $2,263.53 per ounce in global markets on Monday amidst escalating geopolitical tensions in Central Asia and indications from the US Federal Reserve suggesting a potential rate cut.

Reflecting this upward trend in international markets, the price of MCX gold in India skyrocketed to an unprecedented level of Rs 69,487 per 10 grams during initial trading hours, settling at Rs 68,828 by 11:26 am.

Colin Shah, Founder and Managing Director of Kama Jewelry, highlighted, “The surge in gold prices is attributed to signals from the US Federal Reserve indicating a potential rate cut… Gold has consistently remained a favored asset class for central banks and a safe-haven investment avenue.”

Anticipation of lower interest rates tends to diminish the appeal of financial instruments compared to gold, leading to heightened purchases of the precious metal and subsequent price hikes.

Increased geopolitical risks and acquisitions by central banks, notably China, have also contributed to the upward trajectory of gold prices. With ongoing conflicts such as the Russia-Ukraine war and the expansion of the Israel-Hamas dispute into the Red Sea region, investors perceive gold as a desirable safe haven amidst geopolitical uncertainties.

In the domestic market, the demand for gold is driven by its traditional significance in marriages, where it is exchanged in substantial quantities as jewelry between brides and grooms. However, jewelers express concerns that the soaring gold prices may dampen this demand, a sentiment echoed by observations of declining imports of the precious metal.

Dr. Joseph Thomas, Head of Research at Emkay Wealth Management, remarked, “Gold prices have steadily risen over the past six months in anticipation of a dovish Federal Reserve policy… The decline in interest rates bodes well for gold prices. Breaking through significant long-term resistance levels suggests strong momentum, which may persist in the near to medium term, albeit with potential for some profit-taking.”

U.S. Treasury Imposes Groundbreaking Sanctions on Spyware Maker Intellexa for Targeting Officials and Activists

The Treasury Department has taken a significant step by imposing sanctions on the manufacturer of spyware utilized to target government officials, journalists, and activists. This move marks the first instance of imposing sanctions against sellers of commercial spyware, indicating a shift in discouraging the misuse of such surveillance tools.

In a statement, Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson emphasized the importance of these actions in deterring the improper use of commercial surveillance tools. He stated, “Today’s actions represent a tangible step forward in discouraging the misuse of commercial surveillance tools, which increasingly present a security risk to the United States and our citizens.”

The sanctions specifically target two individuals and five entities associated with Intellexa, a Greece-based spyware vendor, for their involvement in the development, operation, and distribution of commercial spyware technology. This technology has been utilized to target various groups, including policy experts, journalists, human rights activists, and government officials.

This move by the Treasury Department represents the first time the U.S. has sanctioned a commercial spyware entity. Commercial spyware has been under scrutiny due to its ability to collect data, access contact lists, and record information without the user’s knowledge or consent.

The sanctions imposed prevent U.S. companies and residents from engaging in business with the listed entities and individuals, which include Intellexa founder Tal Jonathan Dilian and Sara Aleksandra Fayssal Hamou, a manager within the consortium.

The Predator software developed by Intellexa Consortium has been sold to multiple governments globally, with customers paying millions of dollars for its use, according to documents disclosed by Amnesty International in 2022.

These sanctions come in the wake of President Biden’s executive order issued last March, which prohibited the use of commercial spyware within the federal government. Nelson reiterated the commitment of the United States to establish clear boundaries for the responsible development and use of such technologies while safeguarding the human rights and civil liberties of individuals worldwide. He stated, “The United States remains focused on establishing clear guardrails for the responsible development and use of these technologies while also ensuring the protection of human rights and civil liberties of individuals around the world.”

Income Inequality Soars in India: Billionaires Tighten Grip on Economy Amid Political Turmoil

India currently faces an unprecedented level of income inequality, ranking among the highest globally. This disparity between the affluent and the impoverished surpasses that of nations like the US, Brazil, and South Africa, and even exceeds historical records during colonial rule. This raises a crucial question: Despite the significant disadvantage faced by the majority, why do one billion voters opt to further enrich the wealthy during their democratic participation in the upcoming April and May elections?

A recent study conducted by the World Inequality Lab highlights this alarming trend, dubbing India’s current state as the “Billionaire Raj,” a nod to the colonial era. The study spans a century but focuses notably on the period between 2014 and 2022, encompassing the initial eight years of Prime Minister Narendra Modi’s tenure and his right-wing Hindu nationalist Bharatiya Janata Party (BJP).

Under Modi’s leadership, India has witnessed the emergence of an extremely privileged class. The report indicates that fewer than 10,000 individuals among the 920 million adult population earn an average annual income of 480 million rupees ($5.7 million), a staggering figure surpassing the average income by over 2,000 times. Astonishingly, nine out of ten Indians earn less than this average.

The Modi administration has remarkably favored the affluent, resulting in a doubling of real income for the elite few at the pinnacle of the economic hierarchy. This surge in wealth accumulation has outpaced the growth experienced by the median earner by fourfold. At the 99.99% percentile, wealth increased by a staggering 175%, a sharp contrast to the 50% growth observed at the midpoint.

A handful of business magnates, including Mukesh Ambani, Gautam Adani, and Sajjan Jindal, have ascended to the ranks of the world’s wealthiest individuals. However, their wealth accumulation hasn’t been fueled by global market innovation but rather by dominating domestic sectors such as transportation, telecommunications, energy, retail, and media. The Modi government has further incentivized large corporations through tax breaks, monopoly asset allocations like airports, and favorable policies, often at the expense of small businesses and workers.

Despite these economic windfalls for the elite, the benefits have failed to trickle down to the working class. The manufacturing sector, which could have alleviated unemployment, has shrunk significantly, accounting for only 13% of total output compared to China’s 28%. Real wages have remained stagnant for a decade, exacerbating India’s employment crisis, particularly among young college graduates.

Notably, mainstream media, predominantly influenced by wealthy business conglomerates, has neglected to cover protests by unemployed youth demanding government intervention. The dearth of employment opportunities has led to desperation among the youth, with some seeking jobs abroad or even engaging in conflicts like the Russia-Ukraine war.

Despite these economic challenges, voter behavior remains perplexing. In the 2019 elections, Modi’s BJP witnessed a significant increase in vote share, reaching 37%. This trend suggests a likelihood of Modi securing a third term, a forecast echoed by numerous analyses of the upcoming polls.

The affluent have significantly contributed to political funding, with $1.5 billion funneled to the BJP since 2018, comprising 58% of all known political donations. It’s evident that these contributions aim to further the interests of the wealthy elite. However, the anonymity surrounding these donations has drawn scrutiny, culminating in a Supreme Court ruling declaring them unconstitutional.

Despite growing discontent, there’s a prevailing belief among the wealthy that electoral polarization along religious lines will mitigate voter concerns regarding political-business collusion. Additionally, government subsidies have somewhat placated the poor, albeit accompanied by divisive rhetoric targeting minority communities.

India’s recent classification as an “electoral autocracy” by the V-Dem Institute underscores the influence of billionaires on the nation’s democratic integrity. The potential for a stock market surge following a Modi victory further solidifies the oligarchs’ grip on the economy and political narrative.

If current trends persist, a mere 100 million adults could wield unprecedented economic control, paving the way for oligarchic dominance over India’s future.

Survey Reveals Taxation Challenges Faced by NRIs and OCIs Worldwide

A study conducted by SBNRI, a comprehensive investment platform serving NRIs and OCIs, illuminated the complexities encountered by these individuals in tax filing. The issue of double taxation surfaced prominently, with 14.11 percent of NRIs from Australia, 13.10 percent from the UK, and 8.06 percent from the US identifying it as their primary challenge. Moreover, obtaining taxation documents from abroad presented a significant hurdle, with 12.10 percent, 9.05 percent, and 6.02 percent of NRIs from the US, UK, and Australia respectively expressing difficulties in this aspect.

In recent times, India has witnessed a notable increase in its overseas diaspora, comprising roughly 32 million NRIs and OCIs scattered worldwide. Gulf countries hold the highest concentration of Indian expatriates, followed by destinations such as Singapore, the United States, Canada, and the United Kingdom. Nevertheless, despite the expanding diaspora, navigating the tax landscape remains a formidable task for NRIs and OCIs.

The survey also shed light on diverse approaches to tax reporting among NRIs. While some choose to report solely the income earned in India (10 percent of US-based NRIs), others disclose both domestic and foreign income to Indian tax authorities (6 percent from Canada, 4 percent from the US and Singapore respectively). Additionally, a notable percentage of NRIs capitalize on tax-saving options available to them, with 7 percent from the UK and Australia, and 5 percent from Canada and Singapore availing of these opportunities.

Despite the significance of filing tax returns, a minority of NRIs, including 5 percent from Singapore, 4 percent from the UK, and 2 percent from the US, acknowledge not filing returns in India. Among those who do, only a fraction opt to manage the process independently, while the majority enlist the services of tax professionals or advisors for guidance.

The Double Taxation Avoidance Agreement (DTAA) in income tax aims to prevent double taxation, enabling taxpayers to fulfill their tax obligations in a single country. This facilitates increased savings on income and fosters a conducive environment for businesses to prosper. Furthermore, it plays a pivotal role in discouraging tax evasion by providing mechanisms to mitigate the burden of double taxation, thereby enhancing the country’s appeal for investment opportunities.

Beyond taxation concerns, the survey delved into the primary motivations for Indians residing abroad. Better employment prospects emerged as a leading factor, cited by 11 percent from the UK and 9 percent from Canada, while higher education attracted 9 percent, 6 percent, and 5 percent of individuals from Singapore, Canada, and the UK respectively.

As the number of NRIs continues to climb, comprehending and addressing the challenges within the tax landscape remain crucial. SBNRI’s survey underscores the need for ongoing efforts to streamline the tax process for NRIs and OCIs, ensuring smoother financial management for this significant demographic.

US Senate Passes $1.2 Trillion Spending Package, Averts Government Shutdown

The United States Senate has approved a $1.2 trillion spending plan to finance the US government until September, narrowly avoiding a partial government shutdown just moments before a midnight cutoff. Although the votes on numerous amendments are anticipated to persist for hours, the accord ensures uninterrupted funding for crucial government agencies. The bill is poised for President Joe Biden’s signature on Saturday, marking a significant achievement amidst challenging negotiations. Chuck Schumer, the Democratic Senate majority leader, acknowledged the difficulty of the process, stating, “It is good for the American people that we have reached a bipartisan agreement to finish the job.”

Months of contentious debates between the major political parties will finally come to a close with the passage of this legislation, effectively putting an end to the prolonged wrangling. The White House expressed confidence in Congress’s ability to swiftly pass the bill, with the Office of Management and Budget halting preparations for a shutdown in anticipation of President Biden’s imminent endorsement.

Having already secured passage in the House of Representatives by a slim margin of 286 to 134 votes, the bill encountered resistance primarily from Republicans, with 112 voting against it. The approval, narrowly exceeding the necessary two-thirds majority, saw all but 23 Democrats supporting the measure. Despite opposition from a vocal minority of conservatives, who objected to proposed increases in government spending and advocated for reforms to immigration laws, the legislation successfully made its way through Congress.

Congresswoman Marjorie Taylor Greene of Georgia, reflecting the dissatisfaction among some Republicans, filed a motion seeking a new House Speaker, citing objections to the current Speaker’s support for the spending package. The House budget vote underscored a departure from recent trends, with a notable majority of House Republicans opposing a funding bill negotiated by their own party. This divergence from party lines signals a shift in dynamics within the legislative body.

The passage of the $1.2 trillion spending package marks a crucial milestone in ensuring the continued operation of the US government. Despite challenges and disagreements, bipartisan efforts have prevailed, demonstrating a commitment to fulfilling essential governmental functions and averting a potentially disruptive shutdown.

Federal Reserve Holds Rates Steady, Signals Potential Cuts Later; Markets React Positively

The Federal Reserve decided to maintain interest rates at their current levels during its latest meeting, signaling a potential future reduction later in the year. According to updated projections from members of the Fed’s rate-setting committee, there’s an average expectation of three quarter-point rate cuts in 2024, a forecast reminiscent of December’s projections.

This stance was met with enthusiasm from investors, as all major stock indices surged to record highs. The Dow Jones Industrial Average, for instance, leaped by 401 points or 1%.

Chairman Jerome Powell emphasized that while inflation had slightly exceeded expectations in January and February, the fundamental outlook remains unchanged. Powell stated, “I don’t think we really know if this is a bump on the road or something more. We’ll have to find out. In the meantime, the economy is strong. The labor market is strong. Inflation has come way down. And that gives us the ability to approach this question carefully.”

Market observers are speculating a low probability of a rate cut at the upcoming May meeting, with a higher likelihood in June.

Since the previous summer, the Fed has maintained interest rates at their highest levels in over two decades to curb demand and stabilize prices. In Wednesday’s session, committee members unanimously voted to keep the benchmark rate within the range of 5.25 to 5.5%. The Fed stated, “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”

Despite the high interest rates, the economy has shown resilience. The unemployment rate has remained below 4% for more than two years, with employers consistently adding an average of 265,000 jobs monthly over the past three months.

However, the housing market has suffered from the higher interest rates, with existing home sales dropping by 19% last year, marking the lowest level since 1995. Mortgage rates have shown a decline from a peak near 8% last October to 6.74% for a 30-year mortgage last week, according to Freddie Mac.

Retail sales have also experienced a slowdown recently, indicating that some consumers are grappling with the dual challenges of high prices and borrowing costs. Credit card debt surged past $1.1 trillion last year, as reported by the Federal Reserve Bank of New York, with the number of cardholders falling behind on payments surpassing pre-pandemic levels.

New York Maintains Crown as Wealth Capital of America, Bay Area Close Behind: Report

New York maintains its lead as the premier destination for wealth in both the United States and globally.

“New York still leads the U.S. and the world when it comes to wealthy cities.”

According to the USA Wealth Report by Henley & Partners and New World Wealth, the Big Apple boasts nearly 350,000 millionaires and 60 billionaires, solidifying its position as the richest city in America. Despite speculation about affluent individuals departing from the city, its millionaire populace has increased by an impressive 48% over the past decade.

“With nearly 350,000 millionaires and 60 billionaires, the Big Apple is the richest city in America, according to the USA Wealth Report from Henley & Partners and New World Wealth.”

The San Francisco Bay Area secures the second spot among America’s wealthiest cities, surpassing New York in terms of billionaires, with over 305,000 millionaires and 68 billionaires. Notably, the Bay Area has witnessed a remarkable 82% growth in its millionaire population over the last 10 years. Experts anticipate that the surge in investment and advancements in artificial intelligence will further propel the region’s prosperity.

“The San Francisco Bay Area ranks as the second richest city in America, despite topping New York for billionaires, with more than 305,000 millionaires and 68 billionaires.”

Among the top 10 cities, Austin, Texas emerges as the fastest-growing hub for the ultra-wealthy in the United States. Over the past decade, Austin has more than doubled its millionaire population to nearly 33,000. Miami also stands out with an 87% increase in millionaires during the same period, albeit with just a fraction of New York City’s total.

“The fastest-growing U.S. city for the ultra wealthy among the top 10 is Austin, Texas, which has more than doubled its millionaire population over the past decade to nearly 33,000. Miami is up there too, with 87% growth in millionaires over the past decade — but with one-tenth the New York City total.”

Despite the trend of wealth migration to the Sun Belt, encompassing the southern third of the United States known for its sunny climate and tax advantages, the primary wealth centers in the U.S. remain resilient.

“The numbers show that the twin wealth hubs in the U.S. endure, despite wealth migration to the Sun Belt — which is roughly defined as the southern third of the U.S. known for its sunny weather and lower tax states.”

Andrew Amoils, head of research at New World Wealth, affirms the continued dominance of New York City and the Bay Area in American wealth landscape.

“Despite the recent rise of major wealth hubs in Texas and Florida, the Bay Area and New York City are expected to remain America’s wealthiest cities for many more decades to come,”

The top 10 cities in the U.S. with the highest concentrations of millionaires and billionaires are as follows:

  1. New York City: 349.5K millionaires, 744 billionaires
  2. Bay Area, California: 305.7K millionaires, 675 billionaires
  3. Los Angeles: 212.1K millionaires, 496 billionaires
  4. Chicago: 120.5K millionaires, 290 billionaires
  5. Houston: 90.9K millionaires, 258 billionaires
  6. Dallas: 68.6K millionaires, 125 billionaires
  7. Seattle: 54.2K millionaires, 130 billionaires
  8. Boston: 42.9K millionaires, 107 billionaires
  9. Miami: 35.3K millionaires, 164 billionaires
  10. Austin: 32.7K millionaires, 92 billionaires
  11. Washington, D.C.: 28.3K millionaires, 88 billionaires

Study Reveals Striking Income Needed for Singles to Live Comfortably in Major U.S. Cities

Living comfortably as a single person in major U.S. metropolitan areas demands a substantial median income, averaging at $93,933, as per a recent analysis by SmartAsset. The term “comfortable” is defined within a 50/30/20 budget framework, which allocates 50% of monthly income to necessities such as housing and utilities, 30% for discretionary spending, and 20% for savings or investments. This analysis is based on extrapolations from the MIT Living Wage Calculator.

For the 25 U.S. cities with the highest cost of living, SmartAsset delineates the income requisite for comfortable living:

  1. New York City: $138,570
  2. San Jose, California: $136,739
  3. Irvine, California: $126,797
  4. Santa Ana, California: $126,797
  5. Boston: $124,966
  6. San Diego: $122,803
  7. Chula Vista, California: $122,803
  8. San Francisco: $119,558
  9. Seattle: $119,392
  10. Oakland, California: $118,768
  11. Arlington, Virginia: $117,686
  12. Newark, New Jersey: $116,646
  13. Jersey City, New Jersey: $116,646
  14. Long Beach, California: $114,691
  15. Anaheim, California: $114,691
  16. Honolulu: $111,904
  17. Los Angeles: $110,781
  18. Aurora, Colorado: $110,115
  19. Portland, Oregon: $110,032
  20. Riverside, California: $109,408
  21. Atlanta: $107,453
  22. Sacramento, California: $104,790
  23. Raleigh, North Carolina: $102,752
  24. Gilbert, Arizona: $102,752
  25. Glendale, Arizona: $102,752

New York City tops the list with a requirement of $138,570 for a single person to live comfortably, while Houston ranks the lowest among major U.S. cities examined, necessitating $75,088.

The analysis reveals that major coastal cities, including Los Angeles, Honolulu, San Francisco, Seattle, and Boston, demand incomes exceeding $110,000 for single individuals to live comfortably. These cities are known for their high living costs, particularly in housing, as reported by The Council for Community and Economic Research.

California’s housing shortage exacerbates the situation, contributing to 11 of its cities being among the most expensive places to live, thus necessitating higher salaries. While employers in high-cost cities often offer above-average salaries to attract and retain talent, housing expenses can challenge the maintenance of a 50/30/20 budget.

In New York City, for instance, a third of residents allocate half their income to rent, according to the Community Service Society. Residents often adjust other aspects of their budgets, such as foregoing homeownership or reducing discretionary spending, to cope with high housing costs.

Living alone in large cities incurs what can be termed a significant “singles tax,” as individuals face elevated costs for necessities like food, shelter, and transportation.

The Bitcoin dips, but soars to new record highs, turning skeptics into believers.

The lowest closing price of Bitcoin (BTC) was $0.05 on July 18, 2010. After 14 years of roller coaster rides, as of this writing today, the price of Bitcoin is trading at $63,147, It is down 5.6% in the last 24 hours. To say that despite this short-term volatility, Bitcoin is up more than 50% year-to-date is no mean feat!
Not only from its origins in the 1970s to the impact of the 2008 financial crisis, but also the recent massive expansion of cryptocurrency continues to grow like a craze on the Internet today. It is a thriller story of mystery, mistrust, risk and reward.
Bitcoin is a form of digital money (cryptocurrency) in which unit transactions are recorded on a digital ledger called the “blockchain”. It started as a concept in a white paper in 2008 and has become the best performing asset of the last decade with its 9,000,000% rise in 2021. You can’t actually hold a Bitcoin in your hands, but you can make a ton of money from one.
Bitcoin blockchain technology works by recording all Bitcoin transactions across a network of computers. Due to its decentralized nature, it is considered a digital ledger that operates on a peer-to-peer basis. Perhaps the most famous value investor of all time, Warren Buffett is against Bitcoin and other cryptocurrencies, saying, “You can’t value Bitcoin because it’s not a value-producing asset.” Buffett and his holding company, Berkshire Hathaway, are known for their investments in sustainable and profitable companies. However, Buffett’s strong anti-crypto stance may change after reviewing the firm’s performance in 2024.
Dave Ramsey, a personal financial expert and best-selling financial author, explains that the value of any currency is based on people’s trust, “Bitcoin has the least amount of trust.” He concluded: “I don’t invest in things where people haven’t established a long track record of trust. ” One day he may change his views!
No one wants to lose money and that is what puts the crypto bear market under so much pressure. As investments begin to decline, investors may struggle to decide how best to manage their portfolios. It would be great if the crypto market was always going up. However, that is not true. As the old saying goes, “Without risk, there is no reward.” Market volatility drives investors to profit. In crypto markets, volatility is considered a feature, but not a constant problem. Bitcoin is not run by any bank or government; It is a peer-to-peer currency.
Unlike the US dollar or any other country’s currency, Bitcoin is not underwritten by any government regulation. As MasterCard and other notable companies bring cryptocurrency to their networks, many are asking: Does this shift signal the “beginning of the end” for the dollar?.
Among the main contextual reasons for Bitcoin’s inception, which began in the middle of the 2008 financial crisis, was mistrust of banks. Bitcoin started as a white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” published on October 31, 2008 by a man named Satoshi Nakamoto. The paper outlined the blockchain technology that underpins the cryptocurrency. The problem with digital money. In March 2014, a news article called “The Face Behind Bitcoin” claimed that the inventor of Bitcoin was a retired physicist named Dorian Nakamoto.
Bitcoin is likely to halve when the reward for mining Bitcoin transactions is halved. These “halvings” reduce the rate at which new coins are created and reduce the available amount of new supply. Bitcoin’s last halving took place on May 11, 2020, when supply was halved, resulting in the creation of a block of 6.25 BTC. A bitcoin halving event occurs when the reward for mining bitcoin transactions is halved. Halves reduce the rate of creation of new coins and reduce the available amount of new supply. Bitcoin last halved on May 11, 2020, resulting in a block reward of 6.25 BTC.
By the end of 2024, a crypto storm may be imminent following the upcoming halving and other favorable developments. With a halving, fewer new bitcoins will be created and they will become more scarce. This scarcity could lead to higher Bitcoin prices in the long run. As a result, the price will rise to $67,500 and reach an all-time high between $72,500 and $73,100. Some experts predict UK fintech firm Finder conducted a study based on expert predictions of 40 crypto industry experts on how Bitcoin will perform until 2030. If hearing is to be believed, it’s predicted to go as high as $200,000!
Interesting tidbit: In the early days of Bitcoin, a programmer named Laszlo Hanics traded 10,000 Bitcoins for two Papa John’s pizzas on May 22, 2010. Today, those pizzas are worth about $613 million. In the crypto community, that date is now celebrated as “Bitcoin Pizza Day.” Now talk about an expensive slice of pizza!

National Settlement Over Real Estate Commissions Set to Reshape Industry Dynamics

The National Association of Realtors has recently finalized a nationwide agreement that has the potential to revolutionize the compensation structure for real estate agents. Critics have long contended that the existing system artificially inflates agents’ commissions, and this settlement marks a significant step towards addressing those concerns.

Traditionally, sellers have had the authority to determine the commission paid to buyers’ agents, often as a prerequisite for utilizing a multiple listing service (MLS), which aggregates homes for sale in a particular region. This combined commission, typically ranging from 5% to 6%, is notably higher than what is observed in many other countries. However, this arrangement has drawn criticism due to the inherent conflict of interest; allowing the home seller to dictate the compensation of the buyer’s agent can create tension, as their objectives in negotiating a home sale often differ.

Under the terms of the settlement, commissions will become more negotiable, potentially leading to a reduction in the overall cost associated with buying and selling homes. While this shift could result in cost savings for consumers, it may also have ramifications for real estate agents, potentially driving some out of business. While home sellers will still have the option to offer a commission to the buyer’s agent, it will no longer be a mandatory requirement for MLS usage.

The National Association of Realtors found itself embroiled in legal troubles, including a staggering $1.8 billion jury verdict last year, along with other lawsuits concerning the commission structure. These legal challenges posed a significant threat to the organization’s financial stability, with the potential of bankruptcy looming.

As part of the settlement agreement, the National Association of Realtors has not admitted to any wrongdoing but has committed to paying $418 million over the next four years. However, this settlement is contingent upon approval from a federal judge. If approved, the changes to real estate commissions are slated to go into effect in July.

Sanders Proposes Four-Day Workweek Bill with No Pay Reduction

Senator Bernie Sanders from Vermont has presented a bill proposing a standard four-day workweek across the United States, with no reduction in pay. The legislation aims to gradually decrease the threshold for overtime pay from the conventional 40 hours to 32 hours over a four-year span. Overtime compensation would be mandated at 1.5 times the regular salary for workdays exceeding 8 hours and at double the regular salary for workdays surpassing 12 hours. The Thirty-Two Hour Workweek Act guarantees that workers’ pay and benefits remain intact, as stated in a press release.

Sanders emphasizes the necessity of this bill, asserting that it aligns with the significant increase in productivity driven by advancements like artificial intelligence and automation. He argues that despite this surge in productivity, many Americans are toiling for extended hours with diminishing wages compared to previous decades. Sanders insists that it’s time for the benefits of technological progress to be shared with the working class, rather than being solely enjoyed by corporate executives and wealthy shareholders.

Joined by Senator Laphonza Butler from California, Sanders introduced the bill, while Representative Mark Takano introduced a corresponding bill in the House. Butler underscores the growing disparity between CEOs’ escalating salaries and the diminishing earnings of the American workforce. She sees the Thirty-Two-Hour Workweek Act as a means to afford hardworking Americans more time with their families while safeguarding their wages and ensuring equitable distribution of profits.

Takano echoes similar sentiments, describing the legislation as transformative for both workers and workplaces. As chair of the Senate Committee on Health, Education, Labor, and Pensions, Sanders introduced the bill before the committee’s scheduled hearing on the topic, where testimony from United Auto Workers President Shawn Fain is anticipated.

Sanders cites various pilot programs and research studies demonstrating improved productivity with a four-day workweek. These studies suggest that happier workers are not only more productive but also less prone to burnout. Additionally, Sanders points to other countries like France, Norway, and Denmark, which have already transitioned to shorter workweeks, with France contemplating a move to a 32-hour workweek.

The proposal comes in the wake of the Fair Labor Standards Act of 1938, which initially established a 44-hour workweek, later phased into the 40-hour workweek standard still in place today.

Former Treasury Secretary Larry Summers Highlights Overlooked Factor in Economic Sentiment: The Cost of Money

The widely followed measure used by the government to gauge the cost of living tracks various expenses each month, but a significant factor is overlooked: the cost of borrowing money itself. This omission could lead to an understatement of the financial strain experienced by many Americans when interest rates rise, impacting expenses such as purchasing a home, securing a car loan, or managing credit card balances.

Former Treasury Secretary Larry Summers presents this argument in a recently published working paper titled “The Cost of Money is Part of the Cost of Living.” He suggests that this oversight might help explain why despite positive economic indicators, a substantial portion of the population remains dissatisfied. Summers points out the discrepancy using the example of the “misery index,” which traditionally combines unemployment and inflation rates. Despite reaching its lowest point since the 1980s, Summers contends that this index fails to capture the true sentiment of consumers.

Summers notes that although there has been some improvement in public perceptions of the economy, a pessimistic outlook persists. Despite robust economic growth, significant job gains, and wages outpacing inflation for a considerable period, a January Gallup poll revealed that 45% of Americans perceive the economy as poor, with 63% believing it’s deteriorating.

Summers humorously remarks, “The economy is booming and everyone knows it — except for the American people.” This contradiction between positive government data and negative public sentiment is likely to become increasingly scrutinized in the lead-up to the November election.

Summers emphasizes the importance of considering the cost of credit, which has surged due to the Federal Reserve’s efforts to raise interest rates to levels not seen in two decades. He argues that the expense of borrowing money should be viewed as part of the overall cost of living. Previously, the consumer price index (CPI) incorporated financing expenses until 1983, measuring housing costs by tracking monthly mortgage payments. However, the current CPI assesses housing costs differently, primarily by examining rental prices. While there were valid reasons for this change, Summers believes it fails to fully capture the financial impact on individuals. He suggests that incorporating interest rates into the calculation is essential for understanding people’s subjective well-being.

Summers suggests that if the pre-1983 CPI formula were still in use, it would have shown even higher inflation rates in 2022, around 15% instead of 9.1%, and inflation would not have decreased as rapidly in 2023.

As a prominent figure in economic discussions, Summers, who served in both the Clinton and Obama administrations, has consistently voiced his opinions. He was among the first to warn about the risk of runaway inflation in 2021 and predicted that a sustained period of high unemployment would be necessary to stabilize prices the following year.

The Federal Reserve has hinted at potential interest rate cuts later this year, which Summers believes could contribute to an improved economic outlook. He observed a positive correlation between decreased mortgage rates in December and January and a notable surge in economic sentiment.

“Insofar as interest rates come down, that’s likely to contribute to improved sentiment,” Summers concluded.

Yale New Haven Health Appoints Katherine Heilpern as President Amidst Leadership Transition and Ongoing Developments

Amid its efforts to acquire three hospitals from Prospect medical and recent criticism over closing a daycare facility, Yale New Haven Health system declared Katherine Heilpern as the new president of Yale New Haven Hospital last week. Heilpern, formerly the chief operating officer of the Weill Cornell Division at NewYork-Presbyterian Hospital and chair of the emergency medicine department at Emory University School of Medicine, is set to assume her new role on March 11. Concurrently, Pamela Sutton-Wallace SPH ’97, previously the interim president of YNHH, will ascend to lead the entire system.

Heilpern, expressing her perspective, stated, “I’ve had leadership positions that have served on both sides of the academic healthcare coin… [which] gives me the opportunity to really understand life at the frontline, and the care that’s being delivered by the providers and how it feels on the side of patients and families.”

Arjun Venkatesh, the chair of emergency medicine, sees Heilpern’s appointment as a significant shift in YNHH’s leadership, especially since she will be one of the few women heading a hospital of its size, which is among the largest in the United States.

Regarding the ongoing developments, Heilpern mentioned that she is unaware of the controversy surrounding daycare closures and views the acquisitions as beyond her current role.

Despite concerns about the expansion, several YNHH officers express confidence in Heilpern and her ability to lead. Venkatesh believes her background as an emergency physician will provide a valuable perspective, emphasizing the importance of clinical experience in hospital leadership.

Alan Friedman, the chief medical officer, believes Heilpern’s clinical acumen will enhance patient care, emphasizing the need for high-quality, safe care. Venkatesh further highlights that Heilpern’s experience may help address overcrowding issues and other systemic challenges.

In an interview, Heilpern outlined her goal of delivering more accessible care and developing an efficient care continuum. She also aims to foster collaboration between various schools within the system to ensure quality care delivery.

With over 5000 medical personnel and nearly 15,000 staff members, Yale New Haven Hospital remains a significant healthcare institution amidst these changes.

Child Tax Credit Expansion Bill Gains Momentum in Bipartisan Push Through Legislative Channels

Child tax credits are poised to see an increase for eligible families as a bipartisan bill progresses through the legislative pipeline.

The Tax Relief for American Families and Workers Act of 2024, currently advancing to the Senate, aims to elevate the refundable portion cap of the child tax credit from $1,800 to $1,900 to $2,000 per tax year from 2023 to 2025. This bill has already cleared the House of Representatives.

Missouri Republican Rep. Jason Smith, chairman of the House’s tax committee, and his Senate counterpart, Oregon Democrat and finance Chairman Ron Wyden, crafted the $78-billion package. Both were contacted for comment by Newsweek, albeit outside regular working hours.

The legislative journey began in January when lawmakers struck a bipartisan deal to broaden child tax credits, enhance low-income housing tax credits, and bolster certain business tax credits.

Under this bill, access to the child tax credit would expand, with a gradual increment in the refundable segment slated for 2023, 2024, and 2025. Moreover, penalties for larger families would be eliminated. Before securing passage in the House, the House Ways and Means Committee voted 40-3 in mid-January to advance the legislation.

President Joe Biden supports the potential legislation. White House spokesman Michael Kikukawa conveyed Biden’s appreciation for the efforts of Chairmen Wyden and Smith in boosting the child tax credit for millions of families and aiding hundreds of thousands of additional affordable homes. Kikukawa’s statement was seen by Newsweek.

The bill received a strong endorsement from the Republican-led House of Representatives, which voted 357-70 on January 31 to approve it, subsequently forwarding it to the Senate.

However, some lawmakers advocate for alterations to the bill. West Virginia Republican Sen. Shelley Moore Capito emphasized the need for the bill to go through the finance committee and undergo an amendment process without predetermined decisions. She stressed the importance of providing opportunities for input during policy-making.

Indiana Republican Sen. Todd Young expressed his desire for changes to be made to the bill before it reaches the floor, without specifying what amendments he seeks, as per NC Newsline.

To pass in the Democrat-led Senate, the bill requires 60 votes. The schedule for a vote remains undecided. Wyden, the Senate’s tax-writing committee chairman, stated his intention to discuss potential amendment votes with Senate leader Chuck Schumer, according to NC Newsline.

Regarding implementation timelines, the Internal Revenue Service (IRS) mentioned that disbursement could commence within six to 12 weeks of the bill’s potential passage. IRS Commissioner Danny Wefel urged taxpayers not to delay filing their tax returns, assuring that any additional refunds due to legislative changes would be processed seamlessly.

An analysis by the Center on Budget and Policy Priorities (CBPP) estimates that approximately 16 million children will benefit from the bill in its first year, including 3 million children under the age of 3. George Fenton, senior policy analyst at CBPP, highlighted that once fully effective in 2025, the expansion could lift over half a million children above the poverty line and extend financial support to about 5 million more children from families with incomes below the poverty line.

Chuck Marr, vice president of federal tax policy at CBPP, emphasized the significance of the bipartisan proposal in targeting the nearly 19 million children currently excluded from the full child tax credit due to their families’ low incomes. Marr noted that the proposal would augment the credit for over 80 percent of these children, potentially lifting hundreds of thousands of children above the poverty line in the inaugural year and reducing the poverty levels of an additional 3 million children.

India Showcases Wedding Destination Diversity: Consulate General in New York Hosts Webinar

The Indian Consulate General in New York recently organized a webinar titled ‘Wedding Destinations in India’ on February 17. The purpose of the session was to introduce various locations across India that offer a rich blend of music, local customs, culture, and a diverse range of settings including desert, forest, mountain, beach, palace, and spiritual locales, along with options for meditational retreats.

The event was graced by the presence of Consul General of India in New York, Binaya Srikanta Pradhan, Deputy Consul General of India, New York, Dr. Varun Jeph, and Parthip Thyagarajan, the CEO of WeddingSutra, a company specializing in providing comprehensive wedding information and inspiration to couples.

Dr. Jeph referred to Indian Prime Minister Narendra Modi’s initiative, “Wed in India,” which encourages affluent families, both within the country and abroad, to choose India as the venue for their family weddings.

CGI Pradhan emphasized India’s status as an ideal wedding tourism destination, stating, “When it comes to wedding tourism, I would say, India probably is the ideal destination.” He highlighted India’s diverse offerings suitable for weddings of all religions and budgets, ranging from the Himalayas and Kerala’s backwaters to Rajasthan’s forts and Orissa’s lakes, as well as the emerging tourism sector in the North East.

Thyagarajan outlined several popular wedding destinations and properties across India. He particularly emphasized the appeal of spiritual sites among Non-Resident Indians (NRIs), such as the Golden Temple in Amritsar and the UNESCO World Heritage Site, the Shore Temple in Mahabalipuram. Thyagarajan also discussed the popularity of temple towns like Tirupati in Andhra Pradesh and Guruvayur in Kerala for weddings on auspicious days, noting that while they offer budget-friendly options, they come with challenges like limited room availability and dining choices.

Additionally, Thyagarajan highlighted Bengaluru’s growing popularity as an ideal wedding destination due to its favorable weather year-round and the availability of quality properties within a short distance from the airport, making it convenient for guests who prefer shorter travel times.

According to a report by WedMeGood, the wedding tourism industry surpassed the $75 billion mark during the 2023-2024 period. In 2023, the Ministry of Tourism launched a wedding tourism campaign aimed at promoting India as a preferred wedding destination and boosting tourism in the country.

Japan Slips to Fourth in Global Economy Rankings as Growth Stalls: Challenges and Prospects Ahead

Japan’s economy has slipped to the fourth position globally, falling behind Germany, as it experienced contraction in the final quarter of 2023. The government’s latest report indicates a 0.4% shrinkage in the economy from October to December, marking the second consecutive quarter of decline. This consecutive contraction signals a technical recession. Despite this setback, Japan saw a 1.9% growth for the entirety of 2023, although it had contracted by 2.9% in the July-September period.

Until 2010, Japan held the position as the world’s second-largest economy, a title it lost to China. Last year, Japan’s nominal GDP reached $4.2 trillion, slightly trailing behind Germany’s $4.4 trillion, or $4.5 trillion depending on currency conversions. The depreciation of the Japanese yen significantly contributed to this decline in ranking, as comparisons of nominal GDP are conducted in dollar terms. Economists attribute Japan’s relative weakness to factors such as a declining population, lagging productivity, and reduced competitiveness.

Real gross domestic product (GDP) serves as a measure of a nation’s goods and services’ value. The annual rate provides insight into the hypothetical outcome if the quarterly rate were to extend over a year. Historically, Japan was celebrated as an “economic miracle,” rapidly recovering from the aftermath of World War II to become the second-largest economy after the United States. However, over the past three decades, Japan’s economic growth has been modest, often stagnant following the burst of its financial bubble in 1990.

Both the Japanese and German economies benefit from robust small and medium-sized businesses with solid productivity levels. Similarly, Germany experienced a contraction of 0.3% in its economy during the last quarter of the previous year, marking it as one of the worst-performing economies globally in that period.

Like Japan, Britain also faced economic contraction in late 2023, entering a technical recession with a 0.3% shrinkage in GDP from October to December. This decline followed a 0.1% fall in the preceding quarter.

Japan’s demographic landscape, characterized by a shrinking and aging population, stands in contrast to Germany’s growing population, nearing 85 million, partly due to immigration compensating for a low birth rate. Tetsuji Okazaki, an economics professor at the University of Tokyo, highlights the implications of Japan’s diminishing influence globally, stating that even sectors like the auto industry, once a stronghold for Japan, face challenges with the rise of electric vehicles.

The increasing parity between developed nations and emerging economies is evident, with India poised to surpass Japan in nominal GDP in the coming years. Despite this, the United States maintains its dominance as the world’s largest economy with a GDP of $27.94 trillion in 2023, while China follows at $17.5 trillion. India’s GDP stands at approximately $3.7 trillion, with a rapid growth rate of around 7%.

Japan’s labor shortage issue could potentially be addressed through immigration, yet the nation has been criticized for its reluctance to accept foreign labor on a permanent basis, opting instead for temporary solutions. Robotics offer another avenue, albeit not yet fully utilized to offset the labor deficit.

Stagnating wages and a negative household savings rate contribute to Japan’s sluggish growth, compounded by businesses diverting investments to faster-growing economies abroad rather than the domestic market. Private consumption declined for three consecutive quarters in 2023, signaling ongoing economic challenges. Marcel Thieliant of Capital Economics predicts a further slowdown in GDP growth, projecting a decrease from 1.9% in 2023 to approximately 0.5% in the current year.

Tax Season Alert: IRS Audit Risks and Red Flags for American Filers

As Americans submit their tax returns this season, there’s a growing concern about IRS audits amidst the agency’s efforts to enhance service, technology, and enforcement.

Recent IRS actions have targeted affluent individuals, large corporations, and intricate partnerships. However, ordinary taxpayers might still find themselves under audit, with specific issues drawing greater IRS scrutiny, experts note.

Ryan Losi, an executive vice president at CPA firm Piascik, cautioned against the risks of the “audit lottery.” He emphasized the importance of accuracy in tax reporting to avoid potential audit triggers.

Audit rates for individual income tax returns have declined across all income brackets from 2010 to 2019 due to decreased IRS funding, according to a Government Accountability Office report. Syracuse University’s Transactional Records Access Clearinghouse reported that in fiscal year 2022, the IRS audited 0.38% of returns, down from 0.41% in 2021.

However, Mark Steber, chief tax information officer at Jackson Hewitt, believes that many Americans might feel overly secure about their audit risk.

Here are some key factors that could raise red flags for IRS audits:

1.Unreported Income: The IRS can easily detect unreported income through information returns sent by employers and financial institutions. Income from freelancing or investments, reported via forms like 1099-NEC or 1099-B, can be particularly scrutinized.

  1. Excessive Deductions: Claiming deductions significantly higher than what’s typical for your income level could draw attention. For instance, if your reported deductions are disproportionate to your income, especially in areas like charitable deductions, it might trigger scrutiny.
  2. Rounded Numbers: Filing with rounded figures, especially for significant deductions, may increase the likelihood of an audit. Experts advise against using rounded estimates and emphasize the importance of accurate reporting.
  3. Earned Income Tax Credit (EITC): This credit, designed for low- to moderate-income earners, has historically attracted scrutiny due to improper payments. While higher-income earners are more likely to be audited, EITC claimants face a substantially higher audit rate due to issues with improper payments.

Despite this, the IRS has announced plans to reduce correspondence audits for EITC claimants starting in fiscal year 2024.

While audit rates have decreased overall, taxpayers should remain vigilant about potential audit triggers and ensure accurate reporting to avoid unnecessary scrutiny from the IRS.

US Inflation Slows in January, Easing Pressure on Federal Reserve Amid Economic Growth

Consumer prices experienced a 3.1% increase in January compared to the previous year, a notable deceleration from the prior month but falling short of the anticipated larger cooldown, according to a report released on Tuesday by the Bureau of Labor Statistics. The slowing inflation trend brought some relief for the Federal Reserve as it evaluates potential interest rate adjustments.

Core inflation, a significant metric that excludes volatile food and energy prices, rose by 3.9% over the year ending in January, matching the slowdown observed in the previous month. This report contrasts with a slight uptick in price hikes seen in December.

The Federal Reserve had been navigating a complex landscape due to the earlier acceleration in inflation, which complicated its strategy to ease its inflation battle through a series of interest rate cuts. Recently, the central bank opted to maintain interest rates at their current levels, choosing to monitor further economic developments before reversing a nearly unprecedented streak of rate hikes initiated last year.

The January slowdown in inflation offers a positive signal for the Fed as it approaches its upcoming rate decision in March. Despite a significant decline from last year’s peak, inflation remains nearly one percentage point above the Fed’s target.

Despite the Federal Reserve’s efforts to temper economic growth by increasing borrowing costs for households and businesses, the U.S. economy has largely resisted these measures. Last month, the economy surpassed expectations by adding 353,000 jobs while maintaining the unemployment rate at a historically low 3.7%, according to data released earlier by the U.S. Bureau of Labor Statistics.

Moreover, recent reports indicate that the gross domestic product (GDP) performed better than anticipated at the end of last year, while consumer sentiment soared in January. However, this remarkable performance may pose challenges for policymakers at the Federal Reserve in their fight against inflation.

The Fed faces the risk of inflation rebounding if it moves too swiftly in cutting interest rates, as heightened consumer demand could fuel a resurgence in price increases. Fed Chair Jerome Powell, speaking in Washington, D.C., last month, acknowledged the consistent decline in inflation over recent months and the robust hiring trends accompanying it. However, he cautioned against an overheated economy.

“We’re not looking for a weaker labor market,” Powell emphasized. “We’re looking for inflation to continue to come down, as it has been coming down for the last six months.”

He further noted, “We’re not declaring victory at this point. We think we have a ways to go.”

Fiscal Forecast: CBO Projects Temporary Dip in Deficit, Long-Term Challenges Loom

The Congressional Budget Office (CBO) released a report on Wednesday, projecting a decrease in the federal budget deficit by $188 billion for this fiscal year, down to $1.5 trillion. However, this dip is expected to be temporary, with forecasts indicating a likely increase in the deficit over the next nine years. The decline in this year’s deficit is attributed to two specific factors, both of which are one-off events, highlighting the ongoing challenge for policymakers to reconcile tax revenues and expenditures.

One factor contributing to the decrease is the timing of the fiscal year, which began on an October weekend, resulting in payments being recorded in fiscal 2023 without corresponding revenues. Additionally, tax revenues are projected to rise due to improved returns on financial investments and the collection of taxes postponed from the previous year due to natural disasters.

Looking ahead, the cumulative budget deficits over the next decade are expected to be 7% smaller than previously forecasted by the nonpartisan CBO. This adjustment is primarily due to an agreement reached between President Joe Biden and Congressional Republicans last summer. This agreement temporarily lifted the statutory debt ceiling in exchange for imposing restrictions on government spending. Economic growth is also anticipated to be stronger than previously predicted, with an increase in the number of people employed.

However, despite these improvements, deficits remain a concern for lawmakers in the years ahead. Challenges include the burden of servicing the total debt load, an aging population leading to increased costs for Social Security and Medicare, and rising healthcare expenses.

The report also warns that the nation’s publicly held debt is projected to escalate from 99% of the gross domestic product (GDP) at the end of 2024 to 116% of GDP by the end of 2034, marking the highest level ever recorded. This increase is fueled by persistent gaps between tax revenues and government expenditures, resulting in borrowing from investors.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, emphasized the need for policymakers to address the severity of the situation and commit to taking necessary actions. While acknowledging that the debt ceiling agreement was a positive step, MacGuineas stressed that more substantial efforts are required.

The CBO’s projections are subject to uncertainties, as laws can change, and economic performance may differ significantly from expectations. For example, last year’s projection of a 4.7% unemployment rate in 2023 contrasts with the current rate of 3.7%. The CBO anticipates a 4.4% unemployment rate by the end of 2024.

Persistent disagreements between Democrats and Republicans regarding the causes and solutions for the national debt have made it a recurring topic in political discourse without leading to comprehensive solutions. Republicans criticize Democrats for excessive spending during President Biden’s administration, while Democrats attribute costs to tax cuts implemented during Donald Trump’s presidency.

Bill Hoagland, senior vice president at the Bipartisan Policy Center, highlighted the uncertainty injected into the economic outlook by political brinkmanship. Hoagland stressed the necessity of bipartisan efforts to address entitlement reform, revenue generation, and the budget process.

The CBO’s 10-year deficit projections may be overly optimistic, assuming the expiration of many tax cuts signed into law by Trump by the end of 2025. Republicans advocate for retaining and potentially expanding these tax cuts, which could reduce expected revenues while simultaneously increasing spending.

Federal Reserve Chair Jerome Powell underscored the unsustainable nature of the growing debt relative to the economy during a recent interview on CBS’s 60 Minutes. Michael A. Peterson, CEO of the Peter G. Peterson Foundation, echoed the urgency of the situation, calling for a bipartisan fiscal commission to propose solutions for placing the country on a more sustainable fiscal trajectory.

Fed Chair Warns of US Dollar’s Unsustainability Amid Global Economic Shift

Fed Chair Raises Concerns About Future of US Dollar Amid Global Economic Shift

In recent times, the Federal Reserve of the United States has pursued an assertive tightening strategy, aiming to elevate interest rates to combat inflation. However, questions have emerged about the sustainability of these measures over the long term. Against the backdrop of BRICS nations’ efforts to reduce dependence on the dollar, Fed Chair Jerome Powell expressed apprehension about the trajectory of the US Dollar.

During an interview with 60 Minutes on CBS News, Powell delved into the broader economic challenges facing the United States. Against the backdrop of 2024 witnessing a global trend away from the US dollar, Powell’s remarks paint a somber picture. As alternative currencies and digital assets gain traction, doubts are cast upon the greenback’s status as the global reserve currency.

“Powell’s assertion that the US Dollar is on an ‘unsustainable’ path underscores the precariousness of the current situation,” the CBS News program highlighted.

The growing influence of the BRICS bloc over the past year has been noteworthy, signaling its ambition to foster a multipolar world. Consequently, as it endeavors to diminish international reliance on the US dollar, the stability of the greenback is increasingly in question.

Chairman Powell’s sentiments mirrored concerns about the US Dollar’s fragility. Against the backdrop of BRICS nations’ de-dollarization initiatives, Powell highlighted the vulnerable state of the country’s escalating debt.

“In the long term, the US is on an unsustainable fiscal trajectory,” Powell emphasized. “This implies that the debt is expanding at a faster rate than the economy, effectively borrowing from future generations.”

Powell’s statement serves as a stark warning, particularly regarding the uncontrolled growth of US debt. This should raise significant concerns for nations relying on the greenback for international trade.

For the BRICS bloc, shifting away from the US dollar was seen as a means of self-preservation. However, it also foreshadowed an imminent decline that could materialize in the coming years. Consequently, as this decline looms, the economic alliance has offered a viable alternative through its de-dollarization efforts. This convergence of factors poses a significant threat to the global reserve status of the world’s most dominant currency.

Visualizing the $105 Trillion World Economy in One Chart

By the end of 2023, the world economy is expected to have a gross domestic product (GDP) of $105 trillion, or $5 trillion higher than the year before, according to the latest International Monetary Fund (IMF) projections from its 2023 World Economic Outlook report.

In nominal terms, that’s a 5.3% increase in global GDP. In inflation-adjusted terms, that would be a 2.8% increase.

ℹ️ Gross Domestic Product (GDP) measures the total value of economic output—goods and services—produced within a given time frame by both the private and public sectors. All numbers used in this article, unless otherwise specified, are nominal figures, and do not account for inflation.

The year started with turmoil for the global economy, with financial markets rocked by the collapse of several mid-sized U.S. banks alongside persistent inflation and tightening monetary conditions in most countries. Nevertheless, some economies have proven to be resilient, and are expected to register growth from 2022.

Ranking Countries by Economic Size in 2023

The U.S. is expected to continue being the biggest economy in 2023 with a projected GDP of $26.9 trillion for the year. This is more than the sum of the GDPs of 174 countries ranked from Indonesia (17th) to Tuvalu (191st).

China stays steady at second place with a projected $19.4 trillion GDP in 2023. Most of the top-five economies remain in the same positions from 2022, with one notable exception.

India is expected to climb past the UK to become the fifth-largest economy with a projected 2023 GDP of $3.7 trillion.

Here’s a look at the size of every country’s economy in 2023, according to IMF’s estimates.

Here are the largest economies for each region of the world.

  • Africa: Nigeria ($506.6 billion)
  • Asia: China ($19.4 trillion)
  • Europe: Germany ($4.3 trillion)
  • Middle East: Saudi Arabia ($1.1 trillion)
  • North & Central America: U.S. ($26.9 trillion)
  • Oceania: Australia ($1.7 trillion)
  • South America: Brazil ($2.1 trillion)
Ranked: 2023’s Shrinking Economies

In fact, 29 economies are projected to shrink from their 2022 sizes, leading to nearly $500 billion in lost output.

A bar chart showing the amount of nominal GDP shrinkage for several countries.

Russia will see the biggest decline, with a projected $150 billion contraction this year. This is equal to about one-third of total decline of all 29 countries with shrinking economies.

Egypt (-$88 billion) and Canada (-$50 billion) combined make up another one-third of lost output.

In Egypt’s case, the drop can be partly explained by the country’s currency (Egyptian pound), which has dropped in value against the U.S. dollar by about 50% since mid-2022.

Russia and Canada are some of the world’s largest oil producers and the oil price has fallen since 2022. A further complication for Russia is that the country has been forced to sell oil at a steep discount because of Western sanctions.

Here are the projected changes in GDP for all countries facing year-over-year decline

More recently, producers have been cutting supply in an effort to boost prices, but concerns of slowing global oil demand in the wake of a subdued Chinese economy (the world’s second-largest oil consumer), have kept oil prices lower than in 2022 regardless.

The Footnote on GDP Forecasts

While organizations like the IMF have gotten fairly good at GDP forecasting, it’s still worth remembering that these are projections and assumptions made at the beginning of the year that may not hold true by the end of 2023.

For example, JP Morgan has already changed their forecast for China’s 2023 real GDP growth six times in as many months after expectations of broad-based pandemic-recovery spending did not materialize in the country.

The key takeaway from IMF’s projections for 2023 GDP growth rests on how well countries restrict inflation without stifling growth, all amidst tense liquidity conditions.

Grocery Prices Surge 30% in Four Years: Consumers Bear the Brunt of Industry’s Profit Drive

The cost of groceries has surged by 30% over the past four years, marking a significant departure from the industry’s foundational aim of providing affordable and abundant food supplies post-World War II. The pandemic-induced disruptions in supply chains have been exploited by the grocery sector to inflate prices substantially, yielding substantial profits despite selling less food. This trend not only burdens consumers’ budgets but also underscores ongoing policy shortcomings within the Biden Administration.

The U.S. grocery market, valued at $1.03 trillion, has seen prices soar nearly 30% across all categories and channels since 2019, even as unit volumes remain stagnant. This translates to consumers spending more while obtaining fewer goods. Corporate dominance in various grocery segments, particularly by a select few consumer packaged goods (CPG) giants, accentuates the market’s lack of competition.

Soft drinks exemplify this consolidation, with Coca-Cola, Pepsico, and Keurig Dr. Pepper controlling around 90% of the market. Despite a 2% decline in unit volumes, soda sales surged by 56%, with prices spiking by 59%. Pepsico, for instance, witnessed a 21% surge in operating profit, primarily driven by consecutive double-digit price hikes over two years.

Similarly, Kraft Heinz, commanding 65% of the packaged cheese market, prioritizes profitability over volume, leading to a 21% price hike despite a mere 6% increase in unit volumes. Chocolate candy sales soared by 34%, accompanied by a 46% price surge, largely dictated by the top three companies—Hershey’s, Mondelez, and Mars—controlling over 80% of the market.

The trend extends to beef, where unit volumes plummeted by 14%, while prices skyrocketed by over 50% in four years, enabling major meat processors like Tyson Foods to double profits through strategic pricing actions.

In the diaper market, unit volumes dropped by 11.7%, yet prices surged by 38%, exceeding $13 per pack, as industry giants like Proctor & Gamble and Kimberly Clark monopolize 70% of the sector.

Further analysis of NIQ data unveils a consistent pattern: processed commodities experience sharper price hikes than their base ingredients. For instance, milk prices surged by 23.8% with a 5.8% decline in unit volumes, while yogurt prices soared by over 47% despite a 10% drop in volumes.

Shrinkflation, a practice of reducing pack sizes while maintaining prices, further exacerbates consumer woes, affecting various categories like household paper products, salty snacks, and cleaning products.

Experts attribute much of this pricing surge to sellers’ inflation, driven by supply shocks that enable tacit collusion among corporations to hike prices and maximize profits.

While conventional wisdom often blames labor costs and consumer demand for inflation, the math doesn’t align. Corporate profits have soared to historic highs, while workers’ share of national income has dwindled. Labor shortages, although garnering media attention, have minimal impact on grocery prices.

Despite widespread consumer outcry and economic strain, initiatives to address corporate price gouging remain limited. However, opportunities abound for regulatory intervention, including summoning food executives to Capitol Hill, scrutinizing anti-competitive practices, and potentially implementing price controls to ensure affordability.

Failure to seize these opportunities could perpetuate high prices, exacerbating food insecurity and economic hardship for millions of Americans. As such, the era of cheap food appears to be nearing its end unless significant policy changes are enacted promptly.

BRICS Welcomes Saudi Arabia, Sparking Interest from 34 Developing Nations in Alliance

Saudi Arabia has officially joined BRICS, the alliance of emerging economies, a move that has piqued the interest of numerous developing nations. This development has sparked discussions about the potential ramifications for global trade dynamics, particularly regarding the dominance of the US dollar.

The inclusion of Saudi Arabia has led to a surge in interest from other developing countries to become part of the BRICS alliance. The reasons behind this growing attraction towards BRICS lie in concerns over mounting U.S. dollar debt and the imposition of sanctions by the White House on emerging economies.

The prospect of more countries settling trade in their local currencies, as advocated by BRICS, poses a significant threat to the supremacy of the US dollar. A shift of this nature would have profound implications for various sectors in the United States.

According to CNN, a total of 34 countries have expressed their desire to join BRICS as of February 1, 2024. South Africa’s Foreign Minister, Naledi Pandor, confirmed this development during a recent press conference. However, specific details regarding the identities of these countries were not disclosed during the joint press briefing.

The mounting interest from developing nations to align with BRICS reflects their eagerness to adapt to evolving financial landscapes. BRICS is leading a global transition away from reliance on the US dollar towards prioritizing transactions in local currencies. This paradigm shift poses a direct challenge to the established financial order traditionally dominated by Western powers.

The overarching goal of the BRICS bloc is to establish a new world order characterized by multipolarity, effectively sidelining the US dollar. Consequently, the forthcoming years will be crucial in determining the fate of the US dollar, with developing countries increasingly prioritizing their own currencies. The next decade could witness a significant struggle as the US dollar fights to maintain its status as the global reserve currency.

India Surpasses Hong Kong to Become Fourth-Largest Stock Market Globally: Bloomberg Report

India’s stock market has achieved a significant milestone, surpassing Hong Kong to claim the title of the fourth-largest equity market globally, as per a report by Bloomberg.

As of January 22, the combined value of shares listed on Indian exchanges reached $4.33 trillion, edging past Hong Kong’s $4.29 trillion. This development highlights India’s growth trajectory, positioning it prominently within the global financial arena. Notably, the United States, China, and Japan hold the top three spots in the world’s largest stock markets hierarchy.

The Bloomberg report underscores the significance of India’s achievement, stating, “India’s stock market overtakes Hong Kong’s for the first time in another feat for the South Asian nation whose growth prospects and policy reforms have made it an investor darling.”

The journey leading to India’s ascent as the fourth-largest stock market globally can be attributed to various factors, including investor-friendly policy reforms and the sustained economic growth of the nation.

The market crossed the $4 trillion mark on December 5, 2023, and continued its upward trajectory owing to several contributing factors. These include a burgeoning retail investor base, consistent inflows from foreign institutional investors (FIIs), strong corporate earnings, and a consumption-driven macroeconomic landscape.

India’s stock market landscape is characterized by the presence of seven official operating stock and commodity exchanges, all regulated by the Securities and Exchange Board of India (SEBI). However, the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE) emerge as the two primary authorities in the country’s stock market arena.

The BSE, headquartered in Mumbai, has contributed significantly to the Indian stock market with a market cap of $3.3 trillion. Meanwhile, the NSE boasts a market cap of $3.27 trillion, further solidifying India’s position as a major player in the global equity landscape.

 

India’s Remarkable Rise to 10th Position in Global 5G Speed Rankings: A Paradigm for Digital Transformation

In a remarkable stride towards technological supremacy, India has swiftly ascended to the 10th position in global 5G speed rankings within just a year of launching its 5G network, boasting a median download speed of 312.26 Mbps, as per a recent Ookla report. This not only surpasses stalwart tech nations like the UK and Japan but also underscores a significant leap from its previous ranking, highlighting India’s prowess in the realm of high-speed connectivity.

Ookla, a leading global authority in mobile and broadband network intelligence, has lauded India’s strategic approach to enhancing its 5G network performance. The nation’s successful implementation of strategic traffic offloading, a model now gaining global recognition, effectively addresses the ubiquitous challenge of network congestion in the telecom industry. As countries grapple with high user density and limited spectrum, they are increasingly turning to India’s template to improve network efficiency and service quality.

India’s efficient spectrum utilization in 5G technology provides a blueprint for global digital partners. By transitioning traffic to 5G, nations can optimize their spectrum resources, serving more users with higher data speeds, a crucial aspect in the data-driven global economy. The impact is being felt globally, with digitally advanced countries like Japan aiming to replicate India’s success in providing faster data speeds and lower latency directly benefiting end-users.

Investment in infrastructure, including the deployment of new 5G base stations and upgrading existing networks, positions India as a guide for other nations in their 5G rollout endeavours. The emphasis on investing in fiber technology for improved backhaul capabilities, replicated globally, underscores the importance of effective backhaul for delivering high-speed connectivity in 5G networks.

India’s achievement is particularly noteworthy when compared to other countries in the Asia-Pacific region, surpassing their European counterparts in 5G speed. The introduction of 5G has not only boosted speeds but also elevated customer satisfaction levels, evident in higher Net Promoter Scores for 5G users compared to 4G users. The deployment of 5G Fixed Wireless Access (FWA) services has further augmented broadband connectivity, particularly in areas where fiber deployment is impractical.

Despite these successes, challenges loom, especially in maintaining and enhancing these speeds. The eventual introduction of 5G pricing will play a pivotal role in shaping consumer perceptions and decisions regarding network upgrades.

India’s telecom giants, including Bharti Airtel and Reliance Jio, have played a pivotal role in the rapid expansion of 5G networks across the country. According to Ericsson’s Mobility report, India is expected to reach 130 million 5G subscribers by the end of 2023, with projections soaring to 860 million by 2029. This anticipated growth rate is among the highest globally, positioning India as a major player in the 5G landscape.

India’s 5G speed of 312.26 Mbps stands out, especially considering the global median speed increase of 20% in Q3 2023, reaching 203.04 Mbps. This progress places India ahead of neighboring nations in South Asia and some G20 countries, creating extensive market opportunities for international telecom equipment manufacturers, service providers, and tech innovators.

India’s burgeoning 5G user base sets the stage for the country to emerge as a global hub for 5G innovation, fostering research and development in critical areas such as the Internet of Things (IoT), smart city technologies, and industrial automation. The global ripple effect is evident as many countries adopt India’s approach in manufacturing core 5G equipment and developing essential supporting technologies.

India’s 5G regulation and policy-making approach are gaining visibility as a potential model for other nations, particularly those in the developing world. Key aspects, including spectrum allocation, network security, and pricing strategies, may set valuable precedents for global telecommunications policy.

The 5G era journey reflects a harmonious blend of technological prowess and strategic market operations. As India continues to expand its 5G footprint, it stands as a key player in the global telecom landscape, showcasing the potential of emerging markets in defining the future of connectivity. In the words of Ookla, India’s rise is not just a leap in speed but a paradigm shift in the global digital landscape.

India’s Economy: A Beacon of Growth in a Turbulent World

Amidst a choppy global landscape, India’s economic trajectory shines with the vibrancy of a beacon, defying headwinds and emerging as one of the fastest-growing major economies in FY22/23 with a remarkable 7.2% growth rate. This feat, as highlighted by the World Bank’s India Development Update (IDU), positions India as a testament to resilience, surpassing global benchmarks and offering valuable lessons for the world.

The IDU underscores India’s economic fortitude in the face of significant global challenges, citing the nation’s growth rate as the second-highest among G20 countries, nearly double the average for emerging market economies. This commendable achievement, the report suggests, stems from India’s robust domestic demand, substantial public infrastructure investment, and the strengthening of the financial sector.

“India’s economic performance is truly remarkable,” declares Kristalina Georgieva, Managing Director of the International Monetary Fund. “Showcasing its robust domestic engine amidst global uncertainties, this growth story, fueled by smart policy interventions and a vibrant private sector, offers valuable lessons for the world.”

Bank credit growth, a pivotal indicator of economic vitality, surged to 15.8% in the first quarter of FY23/24, compared with 13.3% in the corresponding period of FY22/23, indicating a robust financial landscape supporting economic expansion.

India’s economic ascent is far from over. By capitalizing on its strengths, mitigating future challenges, and adopting smart policy measures, India has the potential to become a global economic powerhouse. As Auguste Tano Kouame, World Bank’s Country Director in India, aptly states, “Tapping public spending to attract private investments will create favorable conditions for India to seize global opportunities and achieve even higher growth.

In addressing the spike in headline inflation, the report notes adverse weather conditions as a contributing factor. Headline inflation rose to 7.8% in July, primarily due to increased prices of food items like wheat and rice. Senior Economist and lead author of the report, Dhruv Sharma, anticipates a gradual decrease in inflation as government measures boost the supply of key commodities, ensuring a conducive environment for private investment.

The report also sheds light on India’s fiscal consolidation, projecting a decline in the central government fiscal deficit from 6.4% to 5.9% of GDP in FY23/24. Public debt is expected to stabilize at 83% of GDP, indicating prudent fiscal management. On the external front, the current account deficit is anticipated to narrow to 1.4% of GDP, supported by foreign investment flows and robust foreign reserves.

“India’s handling of the pandemic has been a masterclass in crisis management,” observes Hardeep Puri, Director-General of the World Trade Organization. “Its proactive approach, combined with decisive policy measures, helped mitigate economic damage and paved the way for a faster rebound.”

As the world grapples with economic uncertainties, India’s economic story serves as a testament to the nation’s resilience, foresight, and strategic economic policies. The international community recognizes India’s steadfast commitment to sustaining growth even amidst unprecedented challenges. In the words of global leaders, the remarkable growth of India’s economy stands as a beacon of hope and inspiration for nations around the world, reaffirming India’s status as a key player in the global economic landscape.

India’s Economic Ascent: Poised for a $10 Trillion Dawn by 2030

Davos, Switzerland: India’s economic trajectory has ignited global fervor, with the World Economic Forum (WEF) President Borge Brende predicting a meteoric rise to a $10 trillion economy by 2030. This ambitious feat, if achieved, will propel India from its current fifth-place ranking to the coveted third, surpassing economic giants like Germany and Japan.

Brende’s optimism rests on a bedrock of compelling factors:

  • Robust Growth: Despite global headwinds, India is projected to register an 8% growth rate in 2024, dwarfing the anemic 0.8% global trade growth. This resilience emanates from a thriving service-oriented economy and a digital revolution that is metamorphosing at twice the pace of the rest of the economy.
  • Digital Dynamism: India’s breakneck adoption of digital technologies positions it at the vanguard of the global digital service trade boom. This sector, a goldmine of future job creation and economic expansion, holds immense promise for propelling India’s ascent.
  • Geopolitical Advantage: Amidst a turbulent global landscape, India’s relative geopolitical stability stands out. Coupled with its unwavering focus on bolstering internal infrastructure and research & development, India emerges as an attractive investment haven, further fueling its economic engine.

World leaders have resonated with Brende’s optimism, showering India’s economic potential with accolades:

  • Kristalina Georgieva, Managing Director of the International Monetary Fund: “India is now a beacon of hope for the global economy.”
  • Shinzo Abe, former Prime Minister of Japan: “India’s rise will be one of the defining stories of the 21st century.”
  • Elon Musk, CEO of Tesla and SpaceX: “India is on track to become a true economic powerhouse.”

However, this rapid ascent is not without its own set of challenges:

  • Job displacement: AI and automation pose a potential threat to traditional job markets, necessitating proactive reskilling and upskilling initiatives to ensure a future-proof workforce.
  • Inequality: The widening chasm between the rich and the poor demands urgent attention. Inclusive growth strategies and robust social safety nets are crucial to bridge this gap and ensure shared prosperity.
  • Environmental sustainability: Balancing rapid economic growth with environmental responsibility is paramount for long-term success. Sustainable practices and a green economy are key to securing a future for generations to come.

Brende underscores the criticality of global collaboration and trust-building in navigating these challenges and achieving sustainable prosperity. The WEF 2024 theme, “Rebuilding Trust in a Fractured World,” resonates deeply with India’s journey. As it aspires to solidify its position as a leading economic power, India’s commitment to democracy, inclusivity, and responsible governance will be instrumental in shaping a future of shared progress for itself and the world.India's Economic Ascent Poised for a $10 Trillion Dawn by 2030

Beyond the headline figures, a closer look reveals the driving forces behind India’s economic surge:

  • Government initiatives: Programs like “Make in India” and “Digital India” are fostering innovation, attracting foreign investment, and boosting domestic manufacturing.
  • Policy reforms: Streamlining regulations, simplifying taxes, and investing in infrastructure are creating a conducive environment for businesses to flourish.
  • Young population: India’s demographic dividend, with a burgeoning youth population eager to contribute, presents a vast pool of talent and entrepreneurial spirit.
  • The potential ramifications of India’s economic rise extend far beyond its borders:
  • Regional trade dynamics: India’s economic resurgence is poised to reshape regional trade patterns, making it a key player in South Asia and beyond.
  • Global economic landscape: India’s emergence as a major economic power will undoubtedly redefine global trade partnerships and investment flows.

By harnessing its inherent strengths, embracing technological advancements, and prioritizing responsible governance, India’s $10 trillion dream by 2030 is not just a possibility, but a distinct probability. This economic ascent promises not only to transform India’s own destiny but also to contribute to a more prosperous and equitable world for all.

India’s Diaspora Emerges as a Global Economic Force: Leading the 2023 Global Remittance List with a Record $125 Billion

In a landmark achievement, India has ascended to the summit of the global remittance charts in 2023, registering an astounding $125 billion, according to the latest World Bank report. This financial milestone not only underscores the strength of India’s diaspora but also highlights their pivotal role in shaping the economic landscape of their home country.

The Indian diaspora, dispersed across the globe, has emerged as a significant workforce in key nations, including the United States, the United Kingdom, Singapore, and the Gulf Cooperation Council nations. Their unparalleled contribution to India’s economy is evident in the record-breaking remittance figure, solidifying India’s position at the forefront of South Asian remittances.

The World Bank’s Migration and Development Brief, released on December 18, 2023, reveals that the total remittance flow to low- and middle-income countries reached a staggering $669 billion in 2023. India’s share of $125 billion represents a substantial increase from the previous year’s $111.22 billion, showcasing a remarkable 66% contribution to South Asian remittances in 2023, up from 63% in 2022.

Key contributors to India’s remittance influx are the United States, the United Kingdom, Singapore, and the Gulf Cooperation Council countries, particularly the United Arab Emirates. Collectively, these nations account for 36% of India’s total remittances, with the UAE alone contributing 18%.

Government initiatives have played a pivotal role in bolstering these remittances. The integration of India’s Unified Payments Interface (UPI) with Singapore’s payment systems and collaborations with the UAE, involving the use of local currencies for cross-border transactions, have streamlined the flow of remittances.

Furthermore, India’s implementation of non-residential deposit programs has attracted substantial foreign currency. As of September 2023, non-residential deposits in India amounted to $143 billion, marking a $10 billion increase from the previous year, as per the World Bank report.

The report underscores the role of remittance costs in these financial flows. South Asia, particularly the remittance corridor between India and Malaysia, boasts the lowest remittance costs globally, standing at just 1.9%. This, coupled with robust labor markets and declining inflation in high-income source countries, has been instrumental in the surge of remittances to India.

However, the World Bank cautions against potential risks, including a projected decline in real income for migrants in 2024 due to global inflation and low growth prospects. Despite these concerns, remittances to low- and middle-income countries are expected to grow, albeit at a slower pace, in the coming years.

Crucially, this report sheds light on the multifaceted impact of these financial inflows on the Indian economy. Beyond the monetary value, it signifies a complex interplay of global migration, economic policy, and the pivotal role of the Indian diaspora. As India continues to lead the charge in global remittances, the diaspora’s influence on the nation’s economic trajectory becomes increasingly undeniable.

IMEC: Paving the Way for Global Prosperity through Economic Connectivity

Economic corridors are emerging as transformative agents, capable of fostering increased trade, foreign investment, and societal improvement across participating nations. The India-Middle East-Europe Economic Corridor (IMEC) stands out as a beacon of economic integration, promising to revolutionize interactions among India, the Middle East, and Europe. As we delve into the details of IMEC, its potential as a catalyst for global prosperity becomes increasingly apparent.

At its core, IMEC seeks to establish a multi-modal transport network, seamlessly integrating sea and rail routes, accompanied by innovative infrastructural components like hydrogen pipelines and advanced IT connections. The corridor’s game-changing potential is highlighted by its ability to significantly reduce transit times for goods, offering a more efficient alternative to the Suez Canal and projecting a 40% reduction in transit times. This efficiency not only expedites trade but also renders it more cost-effective, setting the stage for robust economic growth and expanded trade opportunities.

U.S. President Joe Biden’s characterization of IMEC as a “game-changing investment” underscores its potential to influence not only the regions it directly connects but also the global community. The Memorandum of Understanding (MoU) emphasizes the establishment of a “reliable and cost-effective cross-border ship-to-rail transit network,” showcasing the corridor’s potential to reshape global supply chains and international trade dynamics.

European Union President Ursula von der Leyen further emphasizes the corridor’s significance, branding it the “quickest link between India, the Middle East, and Europe.” This accolade positions IMEC as a major catalyst in reducing logistical costs and streamlining trade routes.

Beyond its role in trade facilitation, IMEC holds the promise of driving industrial growth and employment in participating regions. By providing an efficient mechanism for transporting raw materials and finished goods, the corridor is poised to stimulate industrial activity, addressing prevalent employment challenges. The correlation between enhanced transportation infrastructure and economic growth suggests that IMEC’s impact on job creation and industrial development could be substantial.

IMEC’s strategic importance extends to energy security and environmental sustainability. Access to the Middle East’s abundant energy resources is enhanced, bolstering the energy security of participating nations. The corridor’s emphasis on clean energy transportation aligns with global efforts to reduce greenhouse gas emissions, presenting a model for sustainable development.

Furthermore, IMEC’s potential to attract foreign investment and strengthen diplomatic ties positions it as an alternative to China’s Belt and Road Initiative, reshaping global trade dynamics and reducing dependency on traditional maritime routes. The corridor’s focus on cultural integration fosters connections among diverse cultures and civilizations, contributing to enhanced regional connectivity and peace.

IMEC is evidence of India’s strategic realignment towards the Middle East, particularly the Gulf Cooperation Council Countries (GCCs), under Prime Minister Narendra Modi’s leadership. This evolving relationship encompasses security cooperation, cultural ties, and technological exchanges, transcending a simplistic framework of oil trade and market access.

In the context of a shifting global landscape, IMEC represents a transition from a unipolar or bipolar world to a more multipolar system. By knitting together diverse economic, cultural, and political strengths, the corridor contributes to a balanced and resilient global system.

However, the success of IMEC is contingent upon the geopolitical stability of the Middle East. The region’s historical political unrest underscores the global necessity for peace in the Middle East. A stable Middle East is vital for ensuring secure trade routes, reliable energy resources, and unhindered knowledge and people exchange. It creates an environment conducive to the economic and technological collaborations envisioned by IMEC and contributes to global economic stability.

In conclusion, IMEC stands as a testament to the transformative power of economic connectivity, promising to shape a more prosperous and interconnected world. As leaders and nations come together to support this initiative, the potential for IMEC to catalyze global prosperity becomes increasingly tangible, fostering a future of shared economic growth, cultural integration, and geopolitical stability.

Chinese Stock Market Faces Ongoing Turmoil: Economic Challenges and Policy Concerns Spark Investor Anxiety

Chinese stocks have experienced a challenging start to 2024, extending the rough period that began in February 2021, marked by a steady decline since their most recent peak. Over the past three years, approximately $6 trillion, roughly twice the annual economic output of Britain, has been wiped off the value of Chinese and Hong Kong stocks.

The Hang Seng index has plummeted by 10% in the current year alone, accompanied by declines of 7% and 10% in the Shanghai Composite and Shenzhen Component indexes, respectively. These staggering losses, reminiscent of the 2015-2016 Chinese stock market crash, underscore a crisis of confidence among investors who harbor concerns about the country’s future.

Goldman Sachs analysts expressed the challenges faced by investors in Chinese equities over the past three years, stating, “China … [is] currently trading at suppressed valuations and decade-low allocations across [investment] fund mandates.”

China’s economic landscape is marred by a myriad of problems, including a record downturn in real estate, deflation, escalating debt, a declining birthrate, a shrinking workforce, and a shift towards ideology-driven policies that have unsettled the private sector and deterred foreign firms.

Amid a global stock market rally led by Wall Street and Japan, Chinese markets have emerged as the worst performers in 2024, prompting concerns from the Chinese government. Reports suggest that Beijing has taken measures such as requesting banks to sell dollars to support the yuan and preparing for direct intervention to stabilize stocks. Chinese Premier Li Qiang has ordered officials to implement “forceful and effective measures” to stabilize the markets, raising questions about the restoration of investor confidence.

Investors’ apprehensions stem from the perceived lack of effective policies from Beijing to stimulate a sustainable economic recovery. China’s economy, which grew at 5.2% in 2023, experienced its slowest pace of expansion since 1990, with expectations of further slowdown to around 4.5% this year and dropping below 4% in the medium term. This deceleration, considered structural and challenging to reverse, raises concerns about potential decades of stagnation.

Nomura analysts highlighted the confusion surrounding Beijing’s economic policy stance, citing the central bank’s failure to cut its benchmark lending rates and officials’ reluctance to pursue short-term growth at the expense of long-term risks.

The People’s Bank of China’s decision to maintain its medium-term lending facility rate and Loan Prime Rate, contrary to market expectations, has further dampened hopes for a policy shift. Goldman Sachs analysts assert that conventional macro policy easing has fallen short, advocating for a more aggressive, big-bang approach to overturn the negative market narrative.

The real estate crisis, a central driver of China’s economic challenges, necessitates an “effective government backstop” to support failing property developers and stimulate housing demand, according to Goldman Sachs analysts. Additionally, concerns about China’s commitment to reform have intensified due to the crackdown on Big Tech, emphasis on national security, and the increasing dominance of the state sector in key industries, all of which have discouraged investment.

US-China tensions have further prompted US investors to significantly reduce their exposures to and ownership of Chinese equities, contributing to the ongoing market downturn.

In response to the stock market crash, Premier Li has pledged to take action to boost the stock market and improve liquidity. However, the specifics of these measures remain undisclosed. State-owned banks have reportedly supported the Chinese yuan to prevent rapid depreciation, while authorities are considering a direct intervention by mobilizing a stock market stabilization fund of 2 trillion yuan ($282 billion). The fund would purchase mainland China-listed shares through the Hong Kong stock exchange, with an additional 300 billion yuan ($42 billion) earmarked for local funds to invest in mainland Chinese shares.

The Tuesday Bloomberg report suggesting these potential interventions temporarily halted further declines, with the Hang Seng index closing 2.6% higher and the Shanghai Composite up 0.5%.

The stock market rout has triggered public anger on Chinese social media, where over 220 million individuals, accounting for 99% of the total investor base, are invested in China’s stock markets. Topics related to the “market plunge” and “China’s stock market rescue” were trending on Weibo on Tuesday, even prompting influential figures to call on regulators to take effective measures to stem the decline.

Former editor-in-chief for the state newspaper Global Times, Hu Xijin, expressed concern about the continuous decline in the stock market, emphasizing its impact beyond the capital market. He urged Beijing to take immediate action to rescue small investors, citing a personal loss of more than 70,000 yuan ($9,857) since he began investing in the stock market last June.

Millennials Navigate Economic Challenges: Reevaluating the American Dream Amidst Soaring Prices, Housing Dilemmas, and Shifting Priorities

Rachael Gambino and Garrett Mazzeo meticulously followed the financial playbook: education, debt reduction, aggressive savings, marriage, homeownership, and starting a family—a quintessential American dream. However, seated at the kitchen table of their suburban Pennsylvania home, a property they both appreciate and feel somewhat ensnared by, they reflect on their journey, expressing reservations about doing it all over again the same way.

The couple, parents to nine-month-old Miles, has a different perspective for their son. Rachael, 33, observes, “I think a lot of Millennials were forced into saying, ‘you need a four-year degree in order to be successful,’” emphasizing the burden of significant student loan debt taken on at a young age. Concerned about this narrative, she adds, “At 18, you’re signing up to be $100,000 in debt before you even really know how to make the best decisions for yourself. I think we need to change that narrative.”

Rachael and Garrett acknowledge their fortune, both maintaining steady employment and temporarily residing with Rachael’s sister, Kristen Gambino, who helps with the mortgage. Despite these advantages, the couple feels precarious, managing their daily lives meticulously through a budget where Garrett, 35, monitors every dollar flowing in and out. Rachael questions, “This is the American Dream. But at what cost? What are we paying for the American Dream now?”

The Vibecession

In post-Covid America, an odd paradox exists: the economy appears robust, yet a pervasive sense of discontent prevails. A recent CNN poll revealed that a staggering 71% of Americans deemed economic conditions “poor,” with 38% describing them as “very poor.” This sentiment has improved marginally since the summer of 2022 when 82% perceived the economy as poor.

Various factors contribute to this economic dissatisfaction, including soaring prices, a challenging housing market, persistent inequality, and escalating debt. While inflation, reaching decades-high levels, is gradually receding, the aftermath is a landscape of elevated prices for essentials and indulgences deferred during the pandemic, such as concert tickets and vacations.

Despite Millennials making significant strides in wealth accumulation over the past four years, they endured over a decade of stagnant wages and relatively flat wealth growth. Brendan Duke, senior director for economic policy at the Center for American Progress, highlights that Millennials are the most educated generation in U.S. history, but this education came at a substantial cost. Between 1987 and 2017, the cost of attending a public four-year college surged by over 200%, leaving the average student debt for those aged 25 to 34 at $32,000.

Generational Wealth Gap

Millennials, now aged 27 to 42, have struggled to match the wealth accumulation of their Baby Boomer parents and Gen X counterparts. Raised during the economic boom of the 1990s, they entered adulthood during the Great Recession, a period that scarred their early professional lives. The recession not only made entry-level jobs scarce but also delayed the retirement plans of older workers, hindering career progression for the younger generation.

By 2016, families led by Millennials born in the 1980s were approximately 34% below their “wealth expectations.” While this gap has diminished, with Millennials now only 11% below these expectations, they face the highest debt burden across demographics, making them particularly susceptible to economic shocks, such as a pandemic.

The Myth of the Nest Egg

The quintessential American Dream often centers around homeownership as the key to wealth building. However, in the Covid-era economy, this dream has transformed into more of a fantasy. Low housing inventory, a lingering effect of the 2007 housing bubble collapse, combined with remote work trends, led to a surge in home prices between 2021 and 2022.

For Rachael and Garrett, who aimed for a 20% down payment to secure a home in 2022, the rapidly rising home prices and interest rates dealt a painful blow. Missing the low-rate window, they find themselves with a monthly mortgage payment consuming 40% of their take-home income. While interest rates are anticipated to decrease, offering a chance to refinance, the couple currently navigates a challenging financial landscape.

Renting, once seen as less favorable than buying, is now a more financially viable option. A report from Attom, a real estate data company, indicates that renting a three-bedroom home is more affordable than owning a similarly sized unit in nearly 90% of local markets in the U.S. Despite this, homeownership remains a priority for many Millennials, ingrained in them as a fundamental part of the American Dream.

Rachael and Garrett, though acknowledging their relative fortune, harbor concerns about potential financial instability. The fear of job loss or unexpected medical bills looms large, and the eventual departure of Rachael’s sister, currently a tenant, adds another layer of uncertainty to their financial planning.

Silver Linings

The economic challenges faced by consumers in the previous year, marked by rapidly rising prices and interest rates, have been taxing. However, some relief is on the horizon. Wages have outpaced prices since 2019, with Millennials experiencing an average wage increase of 14%, adjusted for inflation, between ages 29 and 38.

While this wage growth is a positive development, Brendan Duke notes that it may not fully alleviate the financial strain on workers who have become parents during the same period. The high cost of childcare often offsets wage increases, emphasizing the need for societal investments in areas like parental leave and affordable housing.

For Rachael and Garrett, the reality of childcare costs prompted a reassessment of their family planning timeline. Rachael expresses the desire to have children close in age, but financial constraints dictate a delay of at least four years before expanding their family.

Rachael and Garrett’s story reflects the broader struggles of Millennials as they navigate the complex economic landscape. The American Dream, once a straightforward path to prosperity, now demands a nuanced approach and a critical examination of the traditional narratives surrounding education, homeownership, and financial stability.

The Global Dance of Currencies: Forbes Unveils Top 10 Strongest Currencies and Their Economic Significance

Currency, often described as the lifeblood of global trade, serves as a pivotal indicator of a country’s economic vitality. The strength of a nation’s currency not only reflects its stability but also showcases a robust financial health that resonates internationally, attracting investments and fostering crucial global partnerships. In essence, a strong currency becomes a shield, enabling nations to weather economic storms and fortify their positions in the intricate web of global commerce. Officially recognized by the United Nations, there are 180 legal tender currencies worldwide. However, the popularity and widespread use of certain currencies don’t necessarily correlate with their actual value or strength.

The delicate dance of currency strength is orchestrated by the interplay of supply and demand, with influences ranging from interest rates and inflation to geopolitical stability.

“A robust currency not only enhances a country’s purchasing power but also underlines its credibility on the world stage,” states a report. Investors seek refuge in currencies that stand firm, setting off a ripple effect that molds financial markets worldwide.

Forbes recently unveiled a list detailing the 10 strongest currencies globally, comparing them with the Indian Rupee and USD, shedding light on the factors contributing to their prominence.

Topping the list is the Kuwaiti Dinar, with one Kuwaiti Dinar equivalent to ₹ 270.23 and $3.25. Following closely is The Bahraini Dinar, valued at ₹ 220.4 and $2.65. The Omani Rial (Rs 215.84 and $2.60), Jordanian Dinar (Rs 117.10 and $1.141), Gibraltar Pound (Rs 105.52 and $1.27), British Pound (Rs 105.54 and $1.27), Cayman Island Dollar (Rs 99.76 and $1.20), Swiss Franc (Rs 97.54 and $1.17), and the Euro (Rs 90.80 and $1.09) make up the rest of the prestigious list.

Notably, the US Dollar, despite its global popularity and status as the most widely traded currency, finds itself at the bottom of the list, with one USD valued at ₹ 83.10. Forbes explains that the US Dollar, while holding the position of the primary reserve currency globally, ranks 10th among the world’s strongest currencies.

According to the exchange rates published on the International Monetary Fund’s (IMF) website as of Wednesday, India holds the 15th position with a value of 82.9 per US Dollar.

The Kuwaiti Dinar, which claims the top spot, has consistently been recognized as the world’s most valuable currency since its introduction in 1960. The success of this currency is attributed to Kuwait’s economic stability, driven by its abundant oil reserves and a tax-free system.

Forbes also highlights the Swiss Franc, the official currency of Switzerland and Liechtenstein, as widely regarded as the most stable currency globally.

It’s crucial to note that the list is based on currency values as of January 10, 2024, and comes with a disclaimer acknowledging the potential for fluctuations in these values.

The unveiling of Forbes’ list not only provides insight into the current strength of global currencies but also emphasizes the intricate relationship between economic stability, natural resources, and taxation systems in determining the strength of a nation’s currency. As the world continues to navigate the complex landscape of international trade, these currency dynamics play a pivotal role in shaping the interconnected web of global commerce.

White House Proposes Overdraft Fee Reduction to Alleviate Financial Strain on Consumers

The White House has unveiled a proposal aimed at significantly lowering the cost of overdrawing a bank account, potentially reducing it to as little as $3. This move, announced by the Consumer Financial Protection Bureau (CFPB), is part of the Biden administration’s ongoing efforts to tackle what it perceives as excessive fees burdening American consumers, especially those living paycheck to paycheck.

President Joe Biden expressed his concerns, stating, “For too long, some banks have charged exorbitant overdraft fees — sometimes $30 or more — that often hit the most vulnerable Americans the hardest, all while banks pad their bottom lines. Banks call it a service — I call it exploitation.”

The proposed rule from the CFPB suggests that banks should only charge customers an amount equal to their cost of providing overdraft services. This would necessitate banks to disclose the operational costs associated with their overdraft services, a requirement that many financial institutions may find challenging.

Alternatively, banks could opt for a benchmark fee applicable across all affected financial institutions. The proposed benchmark fees range from $3 to $14, with the CFPB seeking industry and public input to determine the most suitable amount. The suggested figures are derived from an analysis of the costs incurred by banks in recovering losses from accounts with negative balances that were never repaid.

Another option presented in the proposal is for banks to offer small lines of credit, functioning similarly to credit cards, to allow customers to overdraft. Some banks, such as Truist Bank, already provide such services.

The average overdraft fee, according to Bankrate’s research in August, was $26.61, with certain banks charging as much as $39. Despite various changes made by banks in recent years, the largest banks in the nation still generate around $8 billion annually from overdraft fees, disproportionately impacting low-income households and communities of color.

President Biden, in line with his economic agenda leading into the 2024 election, aims to eliminate what he terms as “junk fees,” with overdraft fees being a major focus. The regulations proposed by the CFPB would exclusively apply to banks with assets exceeding $10 billion, approximately 175 banks that constitute the majority of financial institutions Americans engage with. Smaller banks and credit unions, which often rely more heavily on overdraft fees, would be exempt.

The roots of overdraft services trace back to decades ago when banks initially offered a niche service to allow certain checking account customers to go negative to avoid bouncing paper checks. However, with the surge in popularity of debit cards, overdraft fees became a substantial profit center for banks.

Despite industry changes in response to public and political pressure, the proposed regulations are expected to face strong opposition from the banking sector. The regulations could potentially lead to a prolonged legal battle, with the Supreme Court being the final arbiter. If adopted and successfully navigates political and legal challenges, the new rules are anticipated to take effect in the autumn of 2025.

Acknowledging industry concerns, Lindsey Johnson, President and CEO of the Consumer Bankers Association, warned that the proposal might have unintended consequences, stating, “If enacted, this proposal could deprive millions of Americans of a deeply valued emergency safety net while simultaneously pushing more consumers out of the banking system.”

Despite some banks having introduced measures like reducing fees and adding safeguards to prevent overdrafts, concerns persist that increased regulations might prompt banks to eliminate the service altogether. The fate of the proposal will likely have significant implications for both consumers and the banking industry, setting the stage for a contentious debate on financial regulations and consumer protection.

Google Pay and NPCI Collaborate to Propel India’s UPI onto the Global Stage, Streamlining International Payments and Redefining Digital Payment Infrastructures Worldwide

Alphabet Inc.’s Google Pay is teaming up with the National Payments Corporation of India (NPCI) to propel India’s innovative mobile payment system, the Unified Payments Interface (UPI), onto the global stage.

The collaboration between Google India Digital Services and NPCI aims to streamline international payments for Indian travelers and contribute to the establishment of UPI-like digital payment infrastructures in other countries. This aligns with NPCI’s goal to elevate India’s standing in the global digital payment arena and simplify remittances by reducing reliance on traditional money transfer systems.

Ritesh Shukla, CEO of NIPL, expressed excitement about the potential of this partnership, stating, “UPI has demonstrated to the world the change that happens in economies with the introduction of interoperable, population-scale digital infrastructure, and each economy that joins such networks will create an impact beyond the sum of parts.”

Under the leadership of Prime Minister Narendra Modi, the Indian government has actively promoted the international expansion of UPI. In a significant move last year, India and Singapore merged their systems, enabling real-time monetary transfers. Ongoing explorations for collaborations with countries like Sri Lanka and the United Arab Emirates are indicative of India’s commitment to expanding UPI’s global reach.

According to recent statistics from India’s central bank, in November alone, UPI processed transactions worth approximately $209 billion. The new partnership with Google Pay is expected to further amplify UPI’s reach and influence in the international digital payments sphere.

Google Pay’s alliance with NPCI marks a strategic move to propel UPI onto the global stage, benefiting Indian travelers with simplified international payments and aiding the development of similar digital payment infrastructures worldwide. The enthusiasm expressed by NIPL’s CEO underscores the transformative potential of interoperable digital infrastructure, while the Indian government’s initiatives, under Prime Minister Modi’s leadership, continue to drive UPI’s international expansion. The impressive transaction volumes in November highlight UPI’s current significance, with the collaboration set to enhance its impact in the global digital payments landscape.

 India Takes Center Stage at Davos: Showcasing Innovation, Growth, and Global Business Potential

Along the Davos Promenade, participants of the World Economic Forum encounter the WeLead Lounge, a repurposed storefront highlighting India’s female leadership and talent, and the India Engagement Center, showcasing the country’s growth story, digital infrastructure, and burgeoning startup ecosystem.

In another part of the forum, technology and consulting giants from India, including Wipro, Infosys, Tata, and HCLTech, are making a significant presence to exhibit the country’s prowess in crucial technologies, particularly artificial intelligence, a topic at the forefront of discussions.

The heightened visibility of India at Davos comes after it surpassed China as the world’s most populous country last year. India is now keen on showcasing its evolving strength as an innovative nation and a global business hub, attracting the attention of some of the world’s wealthiest and most influential figures.

Ravi Agrawal, editor-in-chief of Foreign Policy and former CNN India bureau chief, emphasized the significance of India’s presence, stating, “India’s presence is certainly sizable — it has some of the most sought-after spots on the main promenade for tech companies.” He added, “As China’s economy slows down, India’s relatively rapid growth stands out as a clear opportunity for investors in Davos looking for bright spots.

China’s GDP increased by 5.2% last year, a significant improvement from 3% in 2022 but a decline from the 8.1% recorded the year before. In contrast, India achieved a growth rate of 7.2% in the last fiscal year, slightly lower than the just over 9% recorded a year earlier.

India has been actively positioning itself on the global stage, especially in the realms of technology and business. States such as Maharashtra, Tamil Nadu, Telangana, and Karnataka have established their presence at Davos, positioning themselves as leading tech hubs for manufacturing and AI.

“In that sense, the separate state pavilions send a message — that various regions in India are competing with each other to offer global companies the best access,” said Agrawal, an experienced Davos attendee and author of “India Connected,” which explores how smartphones led to a more connected and democratic India.

However, India faces several challenges, including a consistent net migration out of the country and a weakened rupee against the dollar, influenced by high U.S. interest rates and volatile oil prices. The International Trade Administration identifies “price sensitivity” among consumers and businesses as a key risk for doing business in India.

Agrawal raised concerns, stating, “The challenge, as always, is whether India can actually make it easier to do business there, and whether India’s domestic consumers can spend enough to make continued global investment worth it.”

Despite these challenges, foreign direct investment in India has surged, rising from $36 billion in 2014, when Prime Minister Narendra Modi first took office, to $70.9 billion in 2023. Major international manufacturers like Dell, HP, Lenovo, and others are committing to local production in India under the country’s production-linked incentive scheme.

Apple, a notable example, has shifted its production from China to India, opening its first store, Apple BKC, in Mumbai last year. Apple CEO Tim Cook highlighted India’s significance, stating, “We had an all-time revenue record in India. It’s an incredibly exciting market for us and a major focus of ours.”

India is actively courting U.S. chipmakers, hosting the SemiconIndia event last year to showcase investments and announce new ones. AMD plans to invest around $400 million in India over the next five years, including a new campus in Bangalore. Micron also announced plans to invest up to $825 million in setting up a semiconductor assembly and testing facility in Gujarat.

Jack Hidary, CEO of SandboxAQ, emphasized the accelerating adoption of technology in India, particularly in areas like healthcare, due to inefficiencies in public services. He sees AI as an opportunity for India to distinguish itself, noting, “This is a transformation that is well beyond even the mobile phone.” Hidary believes that Mukesh Ambani’s smartphone company, Jio, will bridge the digital gap for about 600 million people in India through a $12 device.

As India positions itself at Davos, 2024 is set to be a crucial year for the country, with general elections scheduled between April and May. During Modi’s tenure, major U.S. tech companies, including Alphabet, Meta, and Amazon, have made substantial investments in India. The country’s stability, popular leadership, and strong growth make it an attractive prospect.

Ian Bremmer, president and founder of Eurasia Group, highlighted India’s positive prospects, saying, “The good thing about India is the fact that it’s a stable country, with a very popular leader.” He contrasted India with the U.S., noting its decentralized nature and predicting individual U.S. states adopting a similar approach in the future.

“It’s not inconceivable to me that in five years time at Davos, you would see individual U.S. states deciding to do the same thing,” Bremmer said. “Texas would be mopping up on fossil fuels and sustainable energy if they had a storefront in Davos this year. And you know, California, frankly, would, too.”

India’s Economic Growth Outlook for 2023-24: NSO Estimates 7.3% Real GDP Growth, but Concerns Linger

India’s economic landscape for the fiscal year 2023-24 is anticipated to witness a growth of 7.3%, surpassing the 7.2% recorded in the previous year, according to the initial advance estimates of national income released by the National Statistical Office (NSO) on Friday. This projection indicates a more optimistic outlook compared to the 7% growth recently projected by the Reserve Bank of India (RBI).

In the first half of the current year, GDP growth stood at a robust 7.7%, providing a positive momentum that the NSO’s advance estimates suggest will continue into the second half, with a growth range of approximately 6.9%-7%. These estimates, relying on data from the first six-eight months of the year, play a crucial role in formulating the Union Budget.

Notably, the NSO anticipates a slight easing in the growth of Gross Value Added (GVA) for the economy, from 7% in the fiscal year 2022-23 to 6.9% in the current year. Furthermore, the nominal GDP growth is projected at 8.9%, falling short of the earlier Budget estimate of 10.5%. Economists caution that this could potentially result in the fiscal deficit exceeding the targeted 5.9% of GDP, possibly reaching around 6%.

Of specific concern is the expected significant drop in GVA growth for the farm sector, plummeting from 4% in the previous year to a mere 1.8% in the current fiscal year. Similarly, Trade, Hotels, Transport, Communication, and Services are projected to experience a notable deceleration in GVA growth, dropping from 14% in 2022-23 to 6.3%. Some economists express skepticism, suggesting these estimates might even be overly optimistic, particularly as concerns about consumption spending emerge.

“The concerning aspect in the GDP data is the weak consumption growth at 4.4%. This would be the slowest consumption growth in the past two decades barring the pandemic year of 2020-21,” cautioned Rajani Sinha, chief economist at CareEdge Ratings.

The NSO highlights that the share of private final consumption expenditure in GDP is expected to decrease to 56.9% this year, the lowest in at least three years, down from 58.5% in 2022-23. While the investment rate is anticipated to rise to nearly 30% of GDP, driven by government capital expenditure, higher consumption growth is deemed vital for private investments to assume the responsibility of stimulating the economy.

Manufacturing GVA growth is forecasted to accelerate to 6.5% in 2023-24 from a mere 1.3% the previous year, demonstrating a positive trend. Additionally, mining GVA is expected to rise to 8.1% from 4.6% in 2022-23, and construction GVA growth is predicted to remain solid at 10.7% this year, building on the 10% uptick recorded in the previous fiscal year.

Providing a numerical perspective, the NSO states, “Real GDP or GDP at Constant (2011-12) Prices in the year 2023-24 is estimated to attain a level of ₹171.79 lakh crore, as against the Provisional Estimate of GDP for the year 2022-23 of ₹160.06 lakh crore, released on 31st May, 2023.”

In parallel, the Reserve Bank of India (RBI) has taken a proactive stance to prevent potential risks to India’s accelerated growth. Governor Shaktikanta Das has pegged the third-quarter real GDP growth for this financial year at 6.5%, with a possible moderation to 6% in the January to March 2024 quarter.

It is essential to note that these projections by the NSO are preliminary, and factors such as improved data coverage, actual tax collections, expenditure on subsidies, and data revisions by source agencies could lead to subsequent revisions. The NSO underscores, “Users should take this into consideration while interpreting the figures.”

The First Revised Estimates for the fiscal year 2022-23 are scheduled for release on February 29, potentially influencing any revisions in the growth rates presented in the advance estimates released earlier.

Critics of the optimistic growth projections voiced their concerns. Aditi Nayar, chief economist at ICRA, highlighted, “The growth assumed for the second half is quite high, given the tepid outlook for agriculture amidst the weak kharif output and ongoing lag in rabi sowing, as well as the feared temporary slowdown in capex ahead of the General Elections.” She believes that agriculture and construction GVA growth for the second half may fall below the NSO estimates, suggesting a more cautious perspective.

Madan Sabnavis, chief economist at Bank of Baroda, echoed these sentiments, stating, “This growth estimate is much higher than what has been projected by the RBI and our estimate of 6.6%-6.7%.” He attributes the anticipated weak agriculture GVA growth to the projected drop in Kharif crop and the sluggish pace of Rabi sowing.

While the NSO’s initial estimates paint an optimistic picture of India’s economic growth for the fiscal year 2023-24, cautionary voices emphasize the potential challenges, particularly in sectors like agriculture and consumption spending. The coming months will reveal the extent to which these estimates align with the evolving economic reality on the ground.

Gautam Adani Resumes Position as Asia’s Wealthiest Person Amidst Legal Respite

In a dramatic turn of events, Gautam Adani has swiftly reclaimed his title as Asia’s wealthiest individual, marking a remarkable resurgence in his financial standing. This resurgence comes on the heels of a recent Supreme Court decision, which declared no further investigations were necessary into the bombshell allegations made by Hindenburg Research against Adani’s conglomerate.

According to the Bloomberg Billionaires Index, Adani’s net worth experienced a staggering surge of $7.7 billion in just one day, reaching an impressive $97.6 billion. This surge allowed him to overtake his Indian counterpart Mukesh Ambani, the Chairman of Reliance Industries Ltd., who found himself trailing by a narrow margin with a net worth of $97 billion.

The roller-coaster ride that Adani endured in the wealth rankings over the past year has been nothing short of extraordinary. Despite vehemently denying Hindenburg’s allegations of corporate fraud, the Adani Group witnessed a substantial erosion of market value, exceeding $150 billion at one point in the previous year. In response, Adani and his conglomerate embarked on a comprehensive strategy to win back investors, address regulatory concerns, repay debts, and restore confidence in their operations.

The turning point for Adani’s fortunes occurred as the Supreme Court intervened, directing the local markets regulator to conclude its investigation into the conglomerate within three months. Furthermore, the court explicitly stated that no additional probes were necessary, effectively bringing closure to the protracted short-seller saga that had plagued Adani Group for the past year.

The market responded positively to this legal reprieve, triggering a remarkable $13.3 billion wealth gain for Adani. This achievement stands as the most significant wealth surge recorded globally this year, an impressive reversal of the substantial wealth losses.

USCIS Announces Premium Processing Fee Hike for H-1B Visa Applications

The United States Citizenship and Immigration Services (USCIS) is set to implement an increase in premium processing fees for H-1B visa applications, effective February 26, 2024.

Under the revised premium processing fee structure, adjustments have been made for forms I-129, I-140, I-539, and I-765. These forms encompass crucial elements of the immigration process, including the immigrant petition for alien worker (I-140), application to change or extend non-immigrant status (I-539), and employment authorization (I-765).

The fee increments are notable, with certain premium processing fees experiencing an uptick from US$1,500 to US$1,685, US$1,750 to US$1,965, and US$2,500 to US$2,805. This represents a 12 percent increase in processing fees for H-1B visas, resulting in a final fee of US$2,805, according to USCIS sources.

These changes are in accordance with the USCIS Stabilization Act, which not only established the existing premium processing fees but also granted the Department of Homeland Security (DHS) the authority to adjust these fees biennially.

“The Department will use the revenue generated by the premium processing fee increase to provide premium processing services, make improvements to adjudication processes, respond to adjudication demands, including reducing benefit request processing backlogs, and fund USCIS adjudication and naturalization services,” stated an official USCIS spokesperson.

In quoting the USCIS Stabilization Act, the premium processing fees have been designed to play a pivotal role in enhancing various aspects of the immigration system. This includes facilitating premium processing services, streamlining adjudication processes, addressing increased adjudication demands, and mitigating the backlog associated with processing benefit requests.

The decision to increase fees, as outlined by the USCIS, is a strategic move to bolster operational capabilities and enhance overall efficiency. The funds generated through the fee adjustments are earmarked for critical areas, including premium processing services, which are expected to benefit from the additional resources.

While some stakeholders may express concerns over the fee hike, the USCIS asserts that these adjustments are imperative for meeting the growing demands and challenges within the immigration system. The agency aims to allocate resources judiciously to ensure a more streamlined and responsive process for handling immigration-related petitions and benefit requests.

It’s essential to note that the premium processing fee increase is part of a broader strategy outlined in the USCIS Stabilization Act, which empowers the DHS to periodically review and adjust fees to align with the evolving needs of the immigration system.

The USCIS, in justifying the fee adjustments, emphasizes the positive impact they will have on reducing processing backlogs and improving the overall adjudication process. The revenue generated from the fee increase is intended to be a proactive measure in addressing the complexities associated with the influx of immigration-related requests.

The USCIS premium processing fee hike for H-1B visa applications is a carefully considered adjustment aimed at fortifying the agency’s capabilities to manage an ever-evolving immigration landscape. As the changes take effect on February 26, 2024, the increased fees will play a pivotal role in enhancing premium processing services, addressing adjudication demands, and ultimately contributing to the efficiency and responsiveness of the USCIS in fulfilling its mission.

President Xi Acknowledges Economic Struggles in New Year Speech: China Grapples with Downturn, Job Woes, and Heightened Tensions Over Taiwan

President Xi Jinping, in his New Year’s Eve speech, acknowledged the economic challenges faced by China’s businesses and job seekers, marking the first time he addressed such issues in his annual messages since 2013. This acknowledgment comes at a crucial time for the world’s second-largest economy, grappling with a structural slowdown characterized by weak demand, rising unemployment, and diminished business confidence.

Xi openly admitted the difficulties faced by some enterprises and individuals in finding jobs and meeting basic needs, stating, “Some enterprises had a tough time. Some people had difficulty finding jobs and meeting basic needs.” His televised remarks, widely circulated by state media, emphasized the gravity of the situation: “All these remain at the forefront of my mind. We will consolidate and strengthen the momentum of economic recovery.”

In sync with Xi’s speech, the National Bureau of Statistics (NBS) released its monthly Purchasing Managers’ Index (PMI) survey, revealing a decline in factory activity in December to the lowest level in six months. The official manufacturing PMI dropped to 49 last month, down from 49.4 in November, indicating a contraction in the manufacturing sector for the third consecutive month.

China’s massive manufacturing sector had been experiencing weakness throughout 2023, with a brief pickup in the first quarter followed by a contraction for five months until September. The economic challenges were further compounded by a prolonged property downturn, record-high youth unemployment, weak prices, and financial stress at local governments.

In response to the economic downturn, Beijing has implemented various measures to revive growth and spur employment. Despite these efforts, the government’s increasing emphasis on state control over the economy, at the expense of the private sector, has unsettled entrepreneurs. The crackdown on businesses in the name of national security has also deterred international investors.

A recent development highlighting this trend was the People’s Bank of China’s approval of an application to remove controlling shareholders at Alipay, the widely used digital payment platform run by Jack Ma’s Ant Group. This move officially marked Ma’s relinquishment of control over the company, part of his broader withdrawal from online businesses. Ma’s companies were among the initial targets of Beijing’s crackdown on Big Tech, viewed as having gained excessive power.

President Xi’s New Year’s speech also included a pledge regarding Taiwan, emphasizing China’s longstanding stance on the self-ruled island democracy. Xi stated, “China will surely be reunified, and all Chinese on both sides of the Taiwan Strait should be bound by a common sense of purpose and share in the glory of the rejuvenation of the Chinese nation.” This comes just two weeks before Taiwan’s presidential elections on January 13.

Xi’s comments on Taiwan were more assertive compared to the previous year, reinforcing his commitment to making Taiwan an integral part of his broader goal to “rejuvenate” China’s global standing. The Communist Party claims Taiwan as its own territory and has not ruled out the use of force to bring the island under its control. The upcoming election in Taiwan, where Vice President Lai Ching-te is seen as a frontrunner, has heightened tensions, with accusations from Taipei about Chinese influence operations ahead of the polls.

India’s Economic Surge Faces Dilemma as Investment Lags

India’s economic landscape is experiencing a remarkable upswing, with soaring stock prices and substantial government investments in critical infrastructure projects. The nation’s gross domestic product (GDP) is projected to grow by 6 percent this year, surpassing the rates of economic giants like the United States and China. However, a notable concern looms large: domestic investment by Indian companies is not keeping pace, posing potential challenges for sustained growth.

In contrast to the robust performance of India’s stock markets, there is a discernible slowdown in long-term investments from both domestic and foreign sources. The disparity raises questions about the sustainability of the current economic boom, especially as the government may need to curtail its extensive spending in the near future.

India’s ambitious goal of becoming a developed nation by 2047, coupled with its continually expanding population, demands a more vigorous growth trajectory, ideally between 8 and 9 percent annually. Prime Minister Narendra Modi, amidst a re-election campaign and rallying public support, faces the challenge of addressing the sluggish investment scenario.

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Picture: The NewYork Times

Sriram Viswanathan, managing partner at Celesta, a Silicon Valley venture capital fund, sees an opportunity for India amid China’s economic slowdown and geopolitical tensions. He notes, “Investors [are] wanting to fill the vacuum that has been created in the supply chain. That, I think, is the opportunity for India.”

The World Bank acknowledges India’s commitment to infrastructure spending during the pandemic, emphasizing the need for a corresponding surge in corporate investments. The concept of a “crowd-in effect,” where government spending attracts private investment, is deemed crucial for sustained economic growth. Auguste Tano Kouamé, the World Bank’s country director for India, underscores the necessity for deeper reforms to encourage private sector investments.

Despite the booming stock markets in Mumbai, valued at nearly $4 trillion, there is a noticeable decline in foreign direct investment, dropping from an annual average of $40 billion to $13 billion in the past year. Foreign investors appear hesitant, cautious about the stability of India’s economic environment.

A key factor contributing to this caution is Modi’s government, which, while pro-business and stable in leadership, tends to intervene in the economy abruptly. Instances of sudden import restrictions on laptops and retroactive taxes on online betting companies have created uncertainty and impacted businesses. The success of conglomerates like Reliance Industries and the Adani Group, closely associated with Modi’s political circle, further raises concerns about fair business practices.

Arvind Subramanian, an economist at Brown University and former chief economic adviser under Modi’s government, highlights the vulnerability felt by domestic investors, particularly those not affiliated with major conglomerates. He acknowledges the positive aspects of the Modi government’s achievements in improving various aspects of the business environment but points out persistent challenges, including bureaucratic red tape.

Foreign officials responsible for attracting investment to India express concerns about lingering difficulties in doing business, citing red tape as a major obstacle. The slow pace of legal processes and enforcement further deters long-term investments.

The underlying weakness in India’s growth story lies in the skewed distribution of consumer wealth. While a small segment of the population can afford luxury goods, the majority grapples with inflation in essential commodities. Banks, though extending credit to consumers, remain cautious about providing the same support to businesses fearing a prolonged belt-tightening phase for the majority of customers.

Subramanian remains cautiously optimistic, citing the annual growth rate, albeit below 6 percent, and the potential for improved infrastructure to attract more private investment. The uneven distribution of consumer wealth, over time, could contribute to raising overall incomes.

The wildcard in India’s economic trajectory is its ability to capture a substantial share of global business from China. Apple’s gradual shift of its supply chain away from China to India serves as a prominent example. While Apple’s market share in India is currently modest, the intention to increase the production share to 25 percent by 2025 could open up significant possibilities for India on the global stage.

India’s economic success is at a crossroads, with the need for a substantial increase in domestic and foreign investments to sustain the current momentum. While challenges persist, the nation’s potential to capitalize on global economic shifts and ongoing reforms could pave the way for a more robust and inclusive growth trajectory. As the world watches, India stands on the precipice of a transformative economic future.

Surge in International Interest as India’s Stock Market Hits Record Highs

Fund manager Abhay Agarwal is witnessing an unexpected surge in calls from international investors, expressing a keen interest in India’s financial landscape. Agarwal, the founder of Mumbai-based Piper Serica Advisors, noted that these inquiries are coming from family offices in Europe and significant investors in the US who had previously shown little inclination towards investing in India. The nature of their questions reveals a newfound seriousness, as Agarwal explains, “For the first time, I find them to be very serious and they’re calling and asking questions such as, ‘Look, will my money be safe? And is there a rule of law here?'”

This heightened interest coincides with India’s stock market reaching historic highs, with the market value of listed companies surpassing $4 trillion in late November, according to Refinitiv. India boasts two major exchanges: the National Stock Exchange of India (NSE) and the BSE, Asia’s oldest bourse, formerly known as the Bombay Stock Exchange. The NSE has now overtaken Hong Kong to become the seventh-largest bourse globally, based on daily transaction value, as per data from the World Federation of Exchanges.

Abhay Agarwal reflects on the changing dynamics, stating, “People are getting excited about India.” International investors contacting him are eager to understand if India can deliver returns similar to China’s performance in the early 2000s. Notably, Agarwal observes a shift in investor profiles, with long-term strategic and financial investors now taking a 10-year perspective rather than a short-term outlook.

India’s benchmark indices, the Sensex and Nifty 50, have seen robust growth, climbing over 16% and 17%, respectively, this year. Additionally, the country is experiencing a surge in Initial Public Offerings (IPOs), with 150 listings in the first nine months of 2023, outpacing Hong Kong’s 42, as reported by Ernst & Young.

The surge in India’s stock market is indicative of the strength and potential of the world’s fastest-growing major economy. The International Monetary Fund (IMF) projects India’s growth at 6.3% this year, with some economists anticipating a closer figure of 7%. The country’s economy expanded by 7.6% in the quarter ending September 30, surpassing estimates by the central bank, prompting Citigroup and Barclays to revise their annual GDP projections for India to 6.7%.

In contrast, China faces challenges, with weak consumer demand and a protracted real estate crisis affecting its markets. China’s Shanghai Composite is down 7% this year, and Hong Kong’s Hang Seng Index has plummeted nearly 19%. The divergent growth trajectories of India and China are becoming crucial in the battle for emerging market investments.

Goldman Sachs, in a November report, highlights India’s resilience, citing its limited economic linkage to China’s end demand. The report notes, “Moreover, Indian equities exhibit the lowest price sensitivity to slowing China growth in the region.” Domestic institutional and retail investors in India are gaining influence, making the country less sensitive to global economic risks. Nomura echoes this sentiment in a December note, stating that India is “less exposed to (a) global trade slowdown” and could act as a counter-weight to North Asia in case of a slowdown in the West and continued disappointment in China.

India’s appeal extends beyond its economic strength, with companies diversifying their supply chains away from China. Apple, for instance, has significantly expanded its production in India, addressing supply chain challenges experienced in mainland China. A survey by the Japan Bank for International Cooperation identifies India as the “most promising medium-term business destination” for Japanese manufacturers, surpassing China due to its economic slowdown and rising tensions between Washington and Beijing.

Looking ahead, foreign investors may exhibit caution in the first half of 2024, coinciding with India’s general election expected in April and May. Goldman Sachs notes that election-related uncertainty and the challenging global macro environment could keep foreign flows weak for the next 3-6 months. However, optimism prevails, with expectations that foreign flows will pick up after the election uncertainty fades, especially if Prime Minister Narendra Modi’s ruling Bharatiya Janata Party secures victory, ensuring political stability.

Not all economists share the same level of optimism regarding India’s prospects. Some anticipate a slowdown, expressing concerns about the sustainability of private consumption, which has been strong but partly debt-fueled. Alexandra Hermann of Oxford Economics warns that this year’s spending may have repercussions next year, particularly as the labor market faces challenges. Additionally, critics argue that the current buoyancy of the stock market may not accurately reflect India’s broader economic challenges, such as job creation for its vast working-age population and the need for sustainable and inclusive growth.

Former central bank governor Raghuram Rajan and economist Rohit Lamba, in their recently-released book “Breaking the Mould,” point out that the profitability of large firms is on the rise, while small and informal businesses face difficulties. They caution that the stock market’s performance offers a misleading picture of the broader economy, with high-employment sectors like apparel and leather experiencing contractions in recent years.

Indian External Affairs Minister Jaishankar Embarks on Crucial Diplomatic Mission to Russia, Focusing on Bilateral Ties and Key Global Issues

India’s External Affairs Minister, S Jaishankar, is poised to embark on a significant five-day diplomatic mission to Russia, commencing on December 25. The objective of this visit is strategically designed to strengthen and augment bilateral relations between the two nations.

The External Affairs Ministry, in a statement released on Sunday, announced that Jaishankar’s itinerary will encompass substantial meetings with top Russian leadership in Moscow, as part of the ongoing high-level exchanges between India and Russia. The visit, scheduled from December 25 to 29, aims to catalyze discussions on various fronts.

During his stay, Jaishankar is scheduled to engage with Russia’s Deputy Prime Minister, Denis Manturov, who also serves as the Minister of Industry and Trade. The focal point of discussions with Manturov will revolve around matters pertaining to economic engagement and trade cooperation between the two nations.

Furthermore, the External Affairs Minister is set to engage in talks with his Russian counterpart, Sergey Lavrov. The agenda for these discussions encompasses a wide spectrum of issues, including bilateral, multilateral, and international topics.

Underscoring the enduring cultural and people-to-people ties between India and Russia, Jaishankar’s visit will encompass engagements in both Moscow and St Petersburg. The External Affairs Ministry emphasized the stability and resilience of the India-Russia partnership, characterizing it as a “Special and Privileged Strategic Partnership.”

The significance of Jaishankar’s visit is highlighted by the absence of the annual leaders’ summit between India and Russia this year. The last summit occurred in New Delhi in December 2021, and travel restrictions on Russian President Vladimir Putin have been in place since the onset of the Ukraine conflict in February 2022.

Key issues anticipated to be addressed during the meetings in Moscow include trade, connectivity, the expansion of the Brazil-Russia-India-China-South Africa (BRICS) grouping, cooperation at multilateral platforms like the United Nations and Shanghai Cooperation Organisation, defense collaboration, and the ongoing situation in Ukraine. Insiders familiar with the matter have suggested that these discussions are pivotal in navigating the evolving geopolitical landscape and fostering a robust partnership between the two nations.

Quoting the External Affairs Ministry, the original article states, “Jaishankar’s itinerary will include significant meetings with top Russian leadership in Moscow,” highlighting the importance of the diplomatic engagements at the highest levels. This aligns with the broader objective of reinforcing bilateral ties.

The article further notes that during his stay, Jaishankar is expected to meet Russia’s Deputy Prime Minister, Denis Manturov, who also serves as the Minister of Industry and Trade. The paraphrased version retains the focus on economic engagement and trade cooperation as central themes of the discussions with Manturov.

In parallel, the paraphrased article maintains the information regarding talks with Russian Foreign Minister Sergey Lavrov, covering a broad spectrum of issues, including bilateral, multilateral, and international topics. This mirrors the comprehensive nature of the diplomatic discourse between the two nations.

The enduring cultural and people-to-people ties between India and Russia are emphasized in both versions of the article. Jaishankar’s engagements in Moscow and St Petersburg are highlighted, underscoring the multifaceted nature of the visit.

The paraphrased article, like the original, accentuates the stability and resilience of the India-Russia partnership, characterizing it as a “Special and Privileged Strategic Partnership.” This reinforces the enduring and strategic nature of the relationship between the two countries.

The absence of the annual leaders’ summit between India and Russia in the current year is noted in both the original and paraphrased versions, with the latter maintaining the context of travel restrictions on Russian President Vladimir Putin since the onset of the Ukraine conflict in February 2022.

Crucial issues expected to be addressed during the Moscow meetings, such as trade, connectivity, BRICS grouping expansion, cooperation at multilateral platforms, defense collaboration, and the situation in Ukraine, are retained in the paraphrased article. The insight from individuals familiar with the matter, emphasizing the discussions’ significance in navigating the evolving geopolitical landscape and fostering a robust partnership, is also preserved.

The paraphrased article encapsulates the key information and quotes from the original, maintaining the integrity of the content while presenting it in a rephrased and concise manner, adhering to the specified word limit.

India Resumes Venezuelan Crude Oil Imports After Three-Year Hiatus Amid Eased US Sanctions

India’s Petroleum Minister, Hardeep Singh Puri, announced that India is set to resume crude oil imports from Venezuela after a three-year hiatus, citing the readiness of several Indian refineries to process heavy crudes. With the United States easing sanctions on Caracas in October, Puri emphasized that India, as a major global consumer of crude oil, is open to purchasing oil from any country not under sanctions.

Puri stated, “Many of our refineries, including (IOC’s) Paradip (refinery), are capable of using that heavy Venezuelan oil, and we will buy…We always buy from Venezuela. It’s when Venezuela came under sanctions that they were not able to supply.” This move comes as at least three Indian refiners—Reliance Industries (RIL), Indian Oil Corporation (IOC), and HPCL-Mittal Energy (HMEL)—have reportedly booked Venezuelan oil cargoes, expected to arrive in India over the next few months. Bharat Petroleum Corporation (BPCL) is also exploring the possibility of resuming oil imports from Venezuela.

India, specifically private sector refiners RIL and Nayara Energy (NEL), was a regular buyer of Venezuelan crude before the imposition of US sanctions in 2019, which led to a cessation of oil imports from Venezuela. According to data from commodity market analytics firm Kpler, the last time India imported Venezuelan crude was in November 2020. In 2019, Venezuela was India’s fifth-largest oil supplier, contributing nearly 16 million tonnes of crude, valued at $5.70 billion, according to India’s official trade data.

With Washington easing sanctions on Venezuela’s oil sector in October, allowing unlimited oil exports for six months, India is looking to capitalize on the opportunity. Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC) and possessing the world’s largest proven oil reserves, is keen to expand its crude sales in major markets. India, being the world’s third-largest consumer of crude oil and heavily reliant on imports to meet over 85 percent of its demand, remains committed to procuring oil from cost-effective sources amid the volatile global oil markets.

The recent developments also shed light on Venezuela’s strategy to offer substantial discounts to Chinese independent refiners, historically its primary buyers during the sanctions. However, reports suggest that these discounts have narrowed in recent weeks due to the easing of sanctions and the interest of other buyers in acquiring Venezuelan oil. Caracas appears motivated to diversify its crude sales by extending discounts to attract buyers in other major markets.

Reliance Industries Chairman Mukesh Ambani Envisions India as a $40 Trillion Economy by 2047, Emphasizes Clean Energy Transition and Youth’s Role in a Sustainable Future

Reliance Industries Chairman Mukesh Ambani has expressed unwavering confidence in the trajectory of the Indian economy, projecting its ascent to a staggering $40 trillion by 2047, a substantial leap from its current standing at $3.5 trillion, according to reports from PTI.

Ambani, speaking at the convocation of Pandit Deendayal Energy University (PDEU) in Gandhinagar, Gujarat, highlighted India’s position as the world’s third-largest energy consumer. He foresaw a doubling of the country’s energy needs by the close of this decade. Emphasizing the necessity for copious amounts of energy to propel this growth, he underscored the imperative nature of ensuring it is clean and green, safeguarding the environment in the pursuit of human progress.

“In fact, India’s energy requirement is set to double just by the end of this decade,” Ambani asserted, addressing the audience at PDEU. He envisioned an unparalleled explosion of economic growth in the next 25 years, portraying it as a crucible for transforming the vision of a cleaner, greener, and sustainable future into a tangible reality.

Ambani posed three pivotal questions as India races to fortify its energy infrastructure: How can universal access to affordable energy be ensured for every citizen and economic activity? How can a swift transition from fossil fuel-based energy to clean and green alternatives be accomplished? And, crucially, how can the expanding needs of the fast-growing economy be shielded from the volatility of the external environment? He coined these queries as the “Energy Trilemma.”

The business magnate, also the wealthiest individual in India, contended that the transition of energy sources holds the utmost significance in propelling India towards becoming a global leader in green, sustainable, and inclusive development.

Demonstrating faith in India’s capability to navigate this trilemma with smart and sustainable solutions, Ambani credited the nation’s exceptionally talented youth for their commitment to combat the climate crisis. He envisioned these young minds designing breakthrough energy solutions that would not only contribute to a robust and self-reliant India but also foster a safer and healthier planet.

Addressing the students, Ambani imparted a message of fearlessness and unwavering confidence in their abilities. “Courage is the ship that can safely sail you across the stormiest seas. You will commit mistakes. But let that not worry or deter you. The one who succeeds in life is the one who corrects his mistakes and continues on his mission boldly,” he asserted.

Reflecting on his own journey, Ambani attributed his success to India, to Bharat. He urged the graduates to contribute wholeheartedly to the greatness and glory of the country, emphasizing that being young in today’s India is a true blessing. He concluded on an optimistic note, proclaiming that the 21st Century is unequivocally poised to be India’s Century as the nation strides forward with confidence.

India Plummets in Global Talent Competitiveness Index, Ranking 103rd – Lowest Among BRICS Nations

The Global Talent Competitiveness Index has witnessed a significant decline for India, plummeting from the 83rd position a decade ago to the 103rd rank in the latest report released earlier this month. Among 134 countries evaluated, India finds itself positioned between Algeria, ranked 102, and Gautemala, ranked 104, both categorized as lower-middle-income countries. This places India well below the median score of the countries assessed. Notably, India’s current standing in the index is the lowest among BRICS nations.

Developed by the renowned chain of business schools, INSEAD, the Global Talent Competitiveness Index serves as a measure of how countries and cities grow, attract, and retain talent. The index comprises two sub-indices: input, which assesses regulatory and business environments, as well as efforts to foster and retain talent, and output, which evaluates the quality of talent.

India’s decline in the GTCI is particularly worrisome, considering the government’s frequent reference to scores on various business indices such as ‘Ease of Doing Business’ and the controversial World Bank-led ‘Doing Business’ scores to bolster its case. Notably, the World Bank Report on ‘Doing Business’ was discontinued due to irregularities in its measurement.

India’s performance in the GTCI stands in stark contrast to other emerging countries that have shown improvement on this index. China, Indonesia, and Mexico, in particular, have been highlighted for their noteworthy progress. China, for instance, has transitioned from being a talent mover to a talent champion, while Indonesia has made significant strides in talent competitiveness over the past decade. Mexico has transformed from a talent laggard to a talent mover, and Brazil is on track to potentially categorize as a talent mover.

In the context of BRICS nations, China leads the group with a rank of 40, followed by Russia at 52, South Africa at 68, and Brazil at 69. In contrast, India’s rank of 103 is the lowest among BRICS countries.

The report emphasizes that India’s talent competitiveness witnessed an increase up to 2020 but has regressed in each of the three subsequent years. A primary factor contributing to this decline is a downturn in business sentiment, significantly impacting the ability to attract talent, with India now ranked 132nd out of 134 in this aspect. This decline extends to both attracting talent from overseas (127th in External Openness sub-pillar) and within the country (129th in Internal Openness).

The report also highlights an increased skills mismatch and greater difficulty in finding skilled employees, positioning India at 121st in both the ‘Employability’ sub-pillar and the ‘Vocational and Technical Skills’ pillar. However, it does acknowledge India’s strength in the ‘Global Knowledge Skills’ category, where innovation and software development contribute to its 69th position in the Talent Impact sub-pillar.

In terms of global rankings, Singapore, Switzerland, and the United States hold the top three positions. European countries continue to dominate the ‘Top 25’ rankings, with Japan dropping out for the first time, and South Korea ascending to take its place.

Despite the debates surrounding India’s position on various business indices, experts argue that focusing on whether the current situation can be labeled a genocide is a misplaced emphasis. Some scholars, like Verdeja, express the view that debates on this matter divert attention and time from addressing the ongoing crisis, stating, “Proving whether something is a genocide takes time and does not actually stop people from being killed.” Hinton concurs, asserting that the fixation on defining a specific moment as genocide can lead to a rigid focus, obscuring the broader perspective of addressing the immediate challenges and finding solutions.

In the broader context, scholars note the significance of using the term genocide to describe specific situations. Segal cites the example of the U.S. government’s refusal to label crimes against the Hutus in Rwanda as genocide, as doing so would have obligated intervention. This lack of action allowed the massacre to continue unabated. Segal emphasizes the importance of naming a situation for what it is, stating, “Without sticking to the truth, we’ll never have a truthful reckoning of how we arrived at the seventh of October, and how we go forward.”

Foreign Businesses Retreat from China Amid Economic Uncertainties

In recent months, foreign businesses have been withdrawing capital from China at a pace surpassing their investments, according to official data. The apprehension stems from a combination of factors, including China’s economic slowdown, low interest rates, and heightened geopolitical tensions with the United States. The upcoming meeting between Chinese leader Xi Jinping and US President Joe Biden is eagerly anticipated, as it may offer insights into the future economic landscape. However, businesses are already exhibiting caution, expressing concerns about geopolitical risks, policy uncertainty, and slowing growth.

Nick Marro from the Economist Intelligence Unit (EIU) highlights the prevailing sentiments, stating, “Anxieties around geopolitical risk, domestic policy uncertainty, and slower growth are pushing companies to think about alternative markets.”

The data reveals a noteworthy shift, with China recording a deficit of $11.8 billion (£9.6 billion) in foreign investment in the three months ending September – a first since records began in 1998. This suggests a trend where foreign companies are not reinvesting their profits in China; instead, they are choosing to relocate their funds elsewhere.

A spokesperson for Swiss industrial machinery manufacturer Oerlikon, which withdrew 250 million francs ($277 million; £227 million) from China last year, emphasized the need for corrections in the face of China’s economic slowdown. Despite the challenges, China remains a vital market for Oerlikon, with close to 2,000 employees, representing over a third of its sales.

Oerlikon’s spokesperson remarked, “In 2022, we were one of the first companies to transparently communicate that we expect the economic slowdown in China to impact our business. Consequently, we began early to implement actions and measures to mitigate these effects.”

The impact of the pandemic has added another layer of complexity for businesses operating in China, the world’s largest market. The stringent “zero-Covid” policy implemented by China disrupted supply chains, affecting companies like Apple, which diversified its production to India. The tensions between China and the US, with fresh export restrictions on critical materials for advanced chips, have also contributed to the shift in business strategies.

While established multinational firms may not be exiting the Chinese market, there is a noticeable reassessment in terms of new investments. Nick Marro notes, “We aren’t seeing many companies pulling out of China. Many of the big multinational firms have been in the market for decades, and they’re not willing to give up market share that they’ve spent 20, 30 or 40 years cultivating. But in terms of new investment, in particular, we are seeing a reassessment.”

Interest rates play a significant role in this reassessment. While many countries raised rates sharply last year, China took a different path by reducing the cost of borrowing to support its economy and struggling property industry. This, coupled with a depreciation of the yuan by over 5% against the dollar and euro, has prompted businesses to redirect their funds overseas for higher investment returns.

The European Union Chamber of Commerce in China emphasizes this trend, stating, “Those with excess cash and earnings in China have been increasingly transferring these funds overseas, where they will earn a higher investment return compared to investments in China.”

Michael Hart, president of the American Chamber of Commerce in China, notes that the withdrawal of profits does not necessarily indicate dissatisfaction with China but rather signifies the maturation of investments. He views it as encouraging, indicating that companies can integrate their China operations into their global operations.

Canada-based aerospace electronics company Firan Technology Group exemplifies this trend. Having invested up to C$10 million ($7.2 million; £5.9 million) in China over the past decade, the company withdrew C$2.2 million from the country last year and in the first quarter of 2023. Firan’s president and chief executive, Brad Bourne, clarifies, “We are not exiting China at all. We are investing and growing our business there and taking out any excess cash to invest elsewhere in the world.”

As uncertainties loom over future interest rates and China-US ties, analysts anticipate potential moves by China’s central bank to lower interest rates further to support the economy. However, this decision comes with challenges, as lowering interest rates could exert additional pressure on the depreciating yuan.

The business community remains cautiously optimistic about the upcoming meeting between Presidents Xi and Biden. Nick Marro suggests, “Direct meetings between the two presidents tend to exert a stabilizing force on bilateral ties.” However, he also notes that until companies and investors feel confident navigating the uncertainties, the drag on foreign investment into China is likely to persist.

The evolving economic landscape in China, coupled with geopolitical tensions and global economic shifts, has prompted foreign businesses to reassess their investments. While established companies may not be abandoning the Chinese market, the trend of redirecting funds overseas reflects a cautious approach influenced by economic uncertainties and a desire for higher investment returns. The upcoming meeting between leaders Xi and Biden is anticipated to provide some clarity, but until then, businesses remain vigilant in navigating the complex dynamics of the Chinese market.

Mortgage Rates Experience Significant Drop, Easing Burden on Homebuyers

In a notable turn of events, mortgage rates witnessed the most substantial one-week decline since November of the previous year. This marks the second consecutive week of rate reduction following seven weeks of consecutive increases. The 30-year fixed-rate mortgage averaged 7.50% in the week ending November 9, down from the preceding week’s 7.76%, as reported by Freddie Mac.

A year ago, the 30-year fixed-rate had reached 7.08%, hitting its peak in 2022. This week’s decline of 26 basis points from the previous week’s rate is the most significant one-week drop since November. Sam Khater, Chief Economist at Freddie Mac, attributes this decline to the decrease in Treasury yields. He emphasizes the potential consequences of the rising household debt, urging significant decreases in mortgage rates for the housing market to avoid stagnation.

Khater stated, “Many consumers are feeling strained by the high cost of living, so unless mortgage rates decrease significantly, the housing market will remain stagnant.”

The average mortgage rate is based on data from Freddie Mac’s thousands of lenders across the nation, focusing on borrowers with a 20% down payment and excellent credit. Notably, the rates for current buyers may differ. Lower mortgage rates could potentially encourage hesitant homebuyers to re-enter the market.

The Mortgage Bankers Association reported a 2.5% increase in all loan applications compared to the previous week, with a 3% rise specifically in applications for home purchase loans. However, despite this uptick, Joel Kan, MBA’s Vice President, and Deputy Chief Economist highlighted that applications for both purchase and refinance loans remain at relatively low levels. The purchase index lags more than 20% behind last year’s pace, indicating a cautious approach by potential homebuyers waiting for increased inventory.

The recent decision by the Federal Reserve to maintain existing interest rates provided a brief reprieve for homebuyers grappling with soaring mortgage rates. Yet, the possibility of an additional Fed rate hike remains uncertain.

Jiayi Xu, an economist at Realtor.com, commented on the need for more economic indicators to determine the adequacy of current policies in addressing inflation. The October jobs report, revealing moderate job growth and reduced wage pressures, might influence policymakers’ confidence in the economy’s continued easing, affecting the upcoming December 12-13 meeting of the Federal Reserve.

Despite the dip in rates, the monthly cost of buying a home has reached a record high due to unaffordability. Realtor.com found that the median home price in October remained similar to the previous year. However, with mortgage rates exceeding 7% since mid-August, the monthly cost to buy a home increased by over $166, marking a 7.4% year-over-year rise—a new record.

While mortgage rates are still relatively high, the difference between current rates and those of a year ago has narrowed. Lisa Sturtevant, Chief Economist at Bright Multiple Listing Service, noted that market conditions are comparable to last November, with consumers adjusting their expectations about mortgage rates. She anticipates that some buyers will act swiftly when rates dip, while others may wait until after the first of the year, hoping for lower rates and increased inventory.

Sturtevant also remarked that while rates are expected to decrease in 2024, they are not projected to return to pre-pandemic levels. She stated, “We are in a new era for mortgage rates, where prospective homebuyers can expect rates to settle above 6%.”

Blooming BRICS: Former White House Economist Warns of Dollar’s Growing Challenge

The US dollar could encounter a formidable challenge from BRICS countries due to their expanding size and influence in global trade, warns former White House economist Joe Sullivan.

Sullivan, in a recent op-ed for Foreign Policy, highlighted the rising concerns that BRICS nations might introduce a currency to rival the US dollar in international trade. This potential currency could potentially displace the dollar from its current dominant position in global trade markets and as the primary reserve currency.

Although BRICS officials have denied the existence of such a rival currency, Sullivan cautioned that the bloc of emerging market countries, which has recently welcomed Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates, poses a threat to the greenback based on its growing influence.

Sullivan also pointed out the substantial influence of the BRICS bloc in commodities markets. Saudi Arabia, Iran, and the United Arab Emirates are among the world’s leading exporters of fossil fuels, while Brazil, China, and Russia are significant exporters of precious metals.

The inclusion of Saudi Arabia, in particular, could provide BRICS+ with a significant advantage, as the Middle Eastern nation holds over $100 billion in US Treasury bonds, contributing to the total holdings of US Treasurys by BRICS countries surpassing $1 trillion, according to Sullivan.

Sullivan argued, “The BRICS+ nations do not need to wait until a shared trade currency meets the technical conditions typical of a global reserve currency before they swing their newly enlarged economic wrecking ball at the dollar.”

He also highlighted the growing prominence of China’s yuan in global trade, as Beijing’s trading partners increasingly use the renminbi.

Sullivan further warned that these trends could eventually place the US dollar in a position similar to that of the British pound in the 1800s when it lost its international dominance.

He explained, “The BRICS+ states do not even necessarily need to have a shared trade currency to chip away at King Dollar’s domain. If BRICS+ demanded that you pay each member in its own national currency to trade with any of them, the dollar’s role in the world economy would diminish. There would not be a clear replacement for the dollar as a global reserve. A variety of currencies would gain in importance.”

However, some economists hold a different view, suggesting that the US dollar’s role as the world’s primary trading and reserve currency will likely persist for an extended period. The data from the Bank of International Settlements and the International Monetary Fund show that the greenback continues to outperform rival currencies in international trade and central bank reserves by a significant margin. The yuan has only recently made modest gains in central banks’ holdings.

Economic Surge in Late Summer and Early Fall Shows Robust Growth

During late summer and early fall, the US economy experienced a significant upswing, marked by strong consumer spending. Recent data revealed that the gross domestic product (GDP) expanded at an annual rate of 4.9% in the months of July, August, and September. This growth rate was more than double that of the previous quarter and represented the highest quarterly growth since the final quarter of 2021.

This robust economic performance is noteworthy, especially considering the concurrent rise in interest rates, which have reached their highest level in over two decades. The driving force behind this growth was the American consumer, who continued to open their wallets and indulge in various expenditures, including the purchase of cars, dining at restaurants, and even buying tickets for events like Taylor Swift concerts. Moreover, an increase in exports and heightened government spending contributed to the overall economic expansion.

Potential Challenges Ahead

However, despite the recent economic boom, analysts and forecasters are cautious about the sustainability of this rapid growth rate in the upcoming months. It is anticipated that economic growth will decelerate as the effects of elevated interest rates begin to take hold. Already, higher interest rates have had a dampening effect on the housing market and could potentially impede other consumer spending as well.

The key question is the extent to which the economy will slow down. Earlier in the year, there were concerns that increased borrowing costs might push the economy into a recession. While those fears have subsided, they are not entirely eliminated, as various challenges continue to loom over the economy. These challenges include the uncertainties arising from a volatile global environment.

A Closer Look at the Strong Economic Performance

The GDP growth rate of 4.9% for the months of July, August, and September showcases the robust state of the US economy during that period. This figure is particularly impressive as it represents a growth rate more than twice as fast as the previous quarter. Notably, it is the highest quarterly growth rate recorded since the final quarter of 2021, signifying a remarkable rebound and strengthening of the US economy.

Consumer spending has played a pivotal role in driving this growth. Americans have been actively contributing to economic expansion by increasing their expenditures. This has encompassed various sectors, such as the automotive industry, where car sales have surged, and the hospitality sector, with a notable increase in restaurant dining. Furthermore, even the entertainment industry benefited, with a surge in demand for events like Taylor Swift concerts.

Additionally, it’s worth highlighting the positive impact of increased government spending on the economy. As government initiatives and projects gained momentum, they provided a supplementary boost to economic growth. Moreover, a rise in exports further bolstered the economy’s performance during this period.

Challenges Ahead for Sustaining Growth

Despite the impressive performance, economic forecasters have sounded a note of caution regarding the sustainability of such a brisk pace of growth. The impending challenge lies in the form of higher interest rates. It is expected that the cumulative effect of these interest rate hikes will eventually curtail economic growth. In fact, the housing market has already experienced a slowdown due to these elevated rates, and this trend might extend to other consumer spending areas.

The critical question centers around the extent to which the economy will decelerate. Earlier in the year, there were concerns that the increased cost of borrowing might push the economy into a recession. While such fears have somewhat receded, they have not disappeared entirely. The economy faces a complex set of challenges, including the uncertainties stemming from the tumultuous global economic landscape. This unpredictability can potentially hinder the pace of economic recovery and growth in the near future.

The economic landscape, despite its recent strength, remains subject to a multitude of external factors, and it will be crucial to monitor these closely in the coming months to assess the durability of the ongoing recovery.

The Top Economies in the World(1980-2075)

As per a new report from Goldman Sachs, the equilibrium of worldwide financial power is projected to move decisively in the next few decades.

In the realistic above, we’ve made a knock diagram that gives a verifiable and prescient outline of the world’s best 15 economies at a few achievements: 1980, 2000, 2022, and Goldman Sachs projections for 2050 and 2075.

Projections and Features for 2050

Rank Country Real GDP in 2050 (USD trillions)
1  China $41.9
2  US $37.2
3  India $22.2
4  Indonesia $6.3
5  Germany $6.2
6  Japan $6.0
7  UK $5.2
8  Brazil $4.9
9  France $4.6
10  Russia $4.5
11  Mexico $4.2
12  Egypt $3.5
13  Saudi Arabia $3.5
14  Canada $3.4
15  Nigeria $3.4

The accompanying table shows the extended top economies on the planet for 2050. All figures address genuine Gross domestic product projections, in light of 2021 USD.

A significant subject of the beyond a very long while has been China and India’s inconceivable development. For example, somewhere in the range of 2000 and 2022, India bounced eight spots to turn into the fifth biggest economy, outperforming the UK and France.

By 2050, Goldman Sachs accepts that the heaviness of worldwide Gross domestic product will move significantly more towards Asia. While this is somewhat because of Asia beating past figures, it is additionally because of BRICS countries failing to meet expectations.

Prominently, Indonesia will turn into the fourth greatest economy by 2050, outperforming Brazil and Russia as the biggest developing business sector. Indonesia is the world’s biggest archipelagic state, and right now has the fourth biggest populace at 277 million.

The Top Economies On the planet in 2075

The accompanying table incorporates the fundamental numbers for 2075. Yet again figures address genuine Gross domestic product projections, in light of 2021 USD.

Rank Country Real GDP in 2075 (USD trillions)
1  China $57.0
2  India $52.5
3  US $51.5
4  Indonesia $13.7
5  Nigeria $13.1
6  Pakistan $12.3
7  Egypt $10.4
8  Brazil $8.7
9  Germany $8.1
10  UK $7.6
11  Mexico $7.6
12  Japan $7.5
13  Russia $6.9
14  Philippines $6.6
15  France $6.5

Projecting further to 2075 uncovers a radically unique world request, with Nigeria, Pakistan, and Egypt breaking into the main 10. A significant thought in these evaluations is quick populace development, which ought to bring about a huge workforce across each of the three countries.

In the mean time, European economies will keep on slipping further down the rankings. Germany, which was once the world’s third biggest economy, will sit at 10th behind Brazil.

It ought to likewise be noticed that China, India, and the U.S. are supposed to have comparative GDPs at this point, recommending fairly equivalent monetary power. Accordingly, how these countries decide to draw in with each other is probably going to shape the worldwide scene in manners that have sweeping ramifications.

India’s IIT Graduates in High Demand Globally

A significant portion, one-third, of graduates from India’s esteemed engineering institutions, specifically the Indian Institutes of Technology (IITs), choose to move abroad. A substantial 65% of these highly-skilled individuals make up the migrants bound for the United States, as revealed in a working paper (pdf) by the National Bureau of Economic Research (NBER).

A striking statistic shows that 90% of the top performers in the annual joint entrance examination for IITs and other renowned engineering colleges have migrated. Furthermore, 36% of the top 1,000 scorers have followed suit, according to the paper released this month.

Many IIT graduates have become leading executives and CEOs in the US. The majority of these immigrants initially move to the US as students and later join the workforce. The NBER paper discovered that “83% of such immigrants pursue a Master’s degree or a doctorate.”

The report highlights the role of elite universities in shaping migration outcomes, stating, “…through a combination of signaling and network effects, elite universities in source countries play a key role in shaping migration outcomes, both in terms of the overall propensity and the particular migration destination.”

There are 23 IITs spread across India, with acceptance rates at many of these prestigious institutions being lower than those of Ivy League colleges. This is especially true for the most sought-after IITs at Kharagpur, Mumbai, Kanpur, Chennai, and Delhi. In 2023 alone, a staggering 189,744 candidates registered for the JEE, competing for a mere 16,598 seats.

Highly skilled Indians are in high demand across global economies

The NBER report highlights the US graduate program as a crucial migration pathway to attract the “best and brightest.”

In a similar vein, the UK’s High Potential Individual visa route allows graduates from the top 50 non-UK universities, including the IITs, to live and work in the country for a minimum of two years. For those with doctoral qualifications, the work visa extends to at least three years.

The report also mentions that recent IIT graduates seeking to move abroad benefit from a network of accomplished alumni and faculty members already settled overseas. Some of these connections even grant access to specific programs where they hold sway over admissions or hiring decisions.

The intriguing example of Banaras Hindu University (BHU) is worth noting

In 2012, this century-old institution, also India’s first central university, was granted IIT status. Interestingly, this elevation took place without any alterations to the staff, curriculum, or admission system at the Varanasi-based institute in Uttar Pradesh.

The NBER report examined 1,956 BHU students who graduated with BTech, BPharm, MTech, or integrated dual degrees between 2005 and 2015. The study found a remarkable 540% increase in migration probability among graduates following the IIT status designation.

The report observed that “…the quality of education/human capital acquired by the students in the cohorts before and after the change remained constant, while only the name of the university on the degree received differed.”

Google Addresses AI Job Loss Concerns with New Courses and Entrepreneur Programs

As an early innovator in artificial intelligence, Google has been striving to keep up with competitors like Microsoft and OpenAI, who have gained ground with advancements such as ChatGPT. Recognizing the need for individuals to develop skills for future job opportunities, Google is taking action to address this pressing issue.

The tech giant has officially introduced its new generative AI learning path, consisting of ten courses aimed at helping the average person gain a deeper understanding of AI and machine learning, particularly as these technologies begin to replace jobs. For investors, it’s always encouraging when prominent Big Tech companies adopt a long-term vision regarding AI.

Google’s new generative AI learning course was announced through a blog post, revealing that seven free courses were initially launched, with three more added to the platform recently. These courses cover topics such as the distinction between AI and machine learning, an introduction to Google’s Vertex AI training platform, and the ethical considerations surrounding responsible AI development.

The course serves as a starting point for users to grasp generative AI, its role within the broader AI landscape, and where to find additional learning resources to help them transition into AI-centric careers. Some may argue that this initiative is merely a strategy to attract potential AI enthusiasts to Google’s training system, ultimately leading them to use Google software for building their own AI and machine learning models and solidifying Google’s position in the AI race.

However, creating AI models requires expertise. The US Bureau of Labor Statistics has projected a 36% growth rate in data scientist roles over the next decade. As such, these new courses are not only practical but also crucial for companies like Google, which will undoubtedly require a vast number of AI-focused data scientists in the future.

AI’s impact on the future of work has generated excitement, with major companies like Microsoft, Amazon, and Nvidia investing billions in AI technologies. However, there is a pressing concern: the potential job losses resulting from AI automation. A recent Goldman Sachs survey estimates that up to 300 million jobs could be lost, with two-thirds of existing roles experiencing a reduction in workload due to AI. On the bright side, AI is expected to contribute $7 trillion to the global economy in the next decade, and 60% of today’s jobs didn’t exist in 1940.

A more optimistic Microsoft survey involving 30,000 workers and business leaders worldwide revealed that 70% of respondents would delegate specific tasks to AI. Business leaders were twice as focused on using AI to boost productivity rather than reducing headcount. Nevertheless, companies like IBM and BT are planning to cut thousands of jobs in favor of AI.

Google’s recent AI initiatives go beyond new courses. The company launched the Google for Startups Growth program in Europe, a three-month course for European AI entrepreneurs focusing on health and wellbeing. Since OpenAI’s ChatGPT debut, Google has been working on its own Bard version for users. The tech giant also announced significant changes to its search function, where it holds approximately 85% market share.

Google, Meta, and TikTok have faced criticism regarding AI-generated content labeling after the European Commission warned about the rapid spread of misinformation. Additionally, AI safety has become a significant concern, as evidenced by Dr. Geoffrey Hinton, one of AI’s founding figures, leaving Google to raise awareness on the subject. Alphabet CEO Sundar Pichai addressed these concerns in a recent Financial Times op-ed, stating, “AI is too important not to regulate, and too important not to regulate well.”

Alphabet’s share price has increased nearly 17% in the past month and over 41% since the beginning of the year. Google’s cloud computing division experienced a 28% YoY revenue growth last quarter. By focusing on upskilling future data scientists and empowering entrepreneurs to develop AI companies, Google is considering the bigger picture, leveraging its dominant search engine market share.

In summary, Google aims to bridge the knowledge gap in AI with new courses and tools, helping the company find skilled engineers and scientists for future AI projects. The stock price outpacing Microsoft may indicate that Google has regained an advantage. These learning courses form part of a strategy that increases reliance on Google’s AI products, attracting investors’ attention as they recognize the shift.

Student Loan Repayments Set to Resume with Potential Debt Forgiveness, New Repayment Plan, and Loan Servicer Changes

Following a hiatus of over three years, federal student loan payments are set to resume in the coming months. The recent debt ceiling agreement, signed into law by President Joe Biden, includes a clause that effectively ends the suspension of federal student loan repayments and may make it more difficult for the U.S. Department of Education to prolong the pause. Consequently, around 40 million Americans carrying education debt can expect their next payment due in September.

During the pandemic, the Biden administration has been actively revamping the federal student loan system. As borrowers return to repayment, they may encounter several modifications either already implemented or in the pipeline. Here are three notable changes:

Potential lower payments due to forgiveness

In August, President Biden introduced a groundbreaking proposal to eliminate $10,000 in student debt for tens of millions of Americans, or up to $20,000 for those who received a Pell Grant during their college years. However, legal challenges led to the closure of the application portal within a month.

The Supreme Court is currently reviewing two lawsuits against the plan, with a ruling expected by the end of the month. If approved, around 14 million individuals, or one-third of federal student loan borrowers, would have their entire balances forgiven, according to higher education expert Mark Kantrowitz.

These borrowers “likely won’t have to make a student loan payment again,” he said. For those with remaining balances, the Education Department plans to “re-amortize” their debts, recalculating monthly payments based on the reduced amount and remaining repayment timeline.

A new income-driven repayment option

The Biden administration is developing a more affordable repayment plan for student loan borrowers. This new program, called the Revised Pay as You Earn Repayment Plan, would require borrowers to contribute 5% of their discretionary income toward undergraduate loans, instead of the current 10%.

According to Kantrowitz, this revamped plan could significantly reduce monthly payments for many borrowers. The payment plan is expected to become available by July 2024, but it may be implemented earlier if circumstances permit.

A new servicer handling loans

During the pandemic, several prominent federal student loan servicers, including Navient, Pennsylvania Higher Education Assistance Agency (also known as FedLoan), and Granite State, announced they would no longer manage these loans. Consequently, around 16 million borrowers will likely have a different company handling their loans when payments resume.

Kantrowitz warned that “whenever there is a change of loan servicer, there can be problems transferring borrower data.” Borrowers should be prepared for potential glitches and will receive multiple notices about the change in lender, according to Scott Buchanan, executive director of the Student Loan Servicing Alliance. If a payment is mistakenly sent to the old servicer, it should be forwarded to the new one.

Saudi Arabia to Slash Oil Production by 1 Million Barrels per Day

Saudi Arabia has revealed its plan to reduce oil production by 1 million barrels per day starting in July, with the intention of promoting “stability and balance” in the global oil market. Despite not basing production decisions on crude oil prices, this action is widely perceived as an effort to bolster oil prices amid worldwide economic instability and potential declines in international demand.

The announcement followed an OPEC+ meeting in Vienna, although Saudi Arabia’s additional production cuts are being implemented independently. The country has stated that these reductions will persist for at least one month and may be prolonged.

OPEC+ nations also consented to extend the oil production cuts initially declared in April until the end of 2024. This decision will decrease the volume of crude oil they contribute to the global market by over 1 million barrels per day. Notably, OPEC+ countries account for approximately 40% of the world’s crude oil production.

Several African nations and Russia had been urged to diminish production, while the United Arab Emirates plans to augment its crude output. Worldwide oil production currently hovers around 100 million barrels per day.

According to Saudi Arabia’s Ministry of Energy, the nation will now produce 9 million barrels of crude oil daily, a reduction of 1.5 million barrels per day compared to earlier this year. These cuts coincide with the end of Memorial Day in the United States and the beginning of the bustling summer travel season, during which crude oil prices typically impact gasoline costs.

In the previous summer, President Biden visited Saudi Arabia—a nation he once labeled a “pariah” state—to request increased oil production from its leaders. Contrarily, OPEC+ members announced a 2 million barrels per day cut in October, which the White House deemed “shortsighted.”

To counteract rising gas prices, the Biden administration has been tapping into the Strategic Petroleum Reserve since last year, releasing millions of barrels of oil.

Economic Growth, Rising Manufacturing and Exports Propel Nation Towards Top Global Economy Rankings

In the past decade, India has experienced 10 transformative changes that are now driving the nation towards doubling per capita income, export market share, increasing manufacturing’s share, enhancing corporate profits, and significantly improving other economic health indicators, according to Morgan Stanley. Their recent report, ‘How India has Transformed in Less than a Decade,’ credits policy changes such as Direct Benefit Transfers (DBTs), supply-side policy reforms, and adjustments to the Insolvency and Bankruptcy Code (IBC) for bringing about overwhelmingly positive shifts in India’s macroeconomic situation, global standing, and local stock markets.

Ridham Desai, Managing Director of Morgan Stanley India, refuted the widespread belief that India has underperformed: “We run into significant skepticism about India, particularly with overseas investors, who say that India has not delivered its potential… and that equity valuations are too rich.” Desai added that this perspective “ignores the significant changes that have taken place in India, especially since 2014.” The report highlights ten crucial changes with extensive implications for both the economy and the market to support his argument.

The ten changes highlighted by Morgan Stanley are:

  1. Supply-side Policy Reforms
  2. Formalisation of the Economy
  3. Real Estate (Regulation and Development) Act
  4. Digitalizing Social Transfers
  5. Insolvency & Bankruptcy Code
  6. Flexible Inflation Targeting
  7. Focus on FDI
  8. India’s 401(k) Moment
  9. Government Support for Corporate Profits
  10. MNC Sentiment at Multi-year High

The consequences of these changes on the economy

The main effect of these transformations is the consistent growth of manufacturing and capital expenditure as a percentage of GDP. Morgan Stanley forecasts that each will increase by 5 percentage points. Furthermore, India’s export market share is predicted to reach 4.5% by 2031, nearly doubling from 2021 levels, while per capita income is anticipated to reach $5,200 in the next ten years. “This will have major implications for change in the consumption basket, with a boost to discretionary consumption,” the report stated, adding, “We expect India’s real growth to average 6.5% in the next 10 years, making India the third-largest economy at nearly $8 trillion by 2031, up from fifth-largest currently.”

This structural shift will impact saving-investment dynamics, strengthening the nation’s external balance sheet and consequently narrowing the current account deficit (CAD). Domestic profits could potentially double, which, although explaining high equity valuations, will result in “a major rise in investments, a moderation in the CAD, and an increase in credit to GDP to support the coming profit growth.”

“Indian companies will likely witness a major increase in their profits share to GDP. Triggered by supply-side reforms by the government, we expect a major rise in investments coupled with a moderation in the current account deficit and an increase in credit to GDP to support this rise,” said Morgan Stanley.

Implications on the stock markets

Upon realizing these consequences, there will likely be a reduced correlation with oil prices and the US recession. This could also prompt a revaluation in domestic stock market valuations. “This reflects persistent domestic demand for stocks and higher growth for longer. India is trading at a premium to long-term history, albeit well off highs and in line with recent history,” the report noted. Additionally, the report observed that India’s beta to emerging markets has decreased to 0.6, a result of enhanced macro stability and a reduction in reliance on global capital market flows to finance the CAD.

Wendy Cutler On The Indo-Pacific Economic Framework Meeting

The U.S.-led Indo-Pacific Economic Framework (IPEF) concluded its meeting on Saturday, with trade ministers from the 14 participating countries agreeing on a deal to coordinate supply chains.

Wendy Cutler, Vice President of the Asia Society Policy Institute, offers the commentary below on the outcomes of the IPEF meeting.

“The 14 IPEF members should be commended for making progress on three pillars of their work, and achieving “substantial conclusion” of  their supply chain work. Reaching agreement among 14 countries, with different levels of development, different priorities and different needs is no small feat. That said, it’s still an open question whether meaningful outcomes can be achieved by the November target date of completion. The challenge of achieving high standards while securing the buy-in of all participants already seems to be impacting the talks, as evidenced by the largely process-oriented announcement on supply chains.  Once released, the final text of the supply chain agreement may shed more light on whether substantive commitments were agreed upon.

“The announcement on the Trade Pillar suggests that while work has ‘advanced,’ the negotiations still face significant hurdles. This is not surprising, given the topics included and lack of offers of market access to allow for traditional trade-offs. Of note, is that work on technical assistance and economic cooperation is singled out as an area where “substantial progress” has been made. Hopefully, this will pave the way for more progress on the tough issues of digital, labor and the environment.

“The Clean Economy Pillar statement language suggests that while IPEF members agree on the importance of the transition to a sustainable economy, there is no meeting of the minds on how IPEF can contribute in concrete terms. The announcement notes that many ideas and proposals are being discussed, but is vague on where the work may be headed in concrete terms.

“On the Supply Chain Pillar,  Ministers announced the ‘substantial conclusion’ of negotiations. Given the importance of supply chain resiliency to individual, regional and the global economy, the IPEF supply chain outcomes are welcome, albeit modest and largely process- oriented.

“The statement lays out nine important objectives of the agreement, including promoting a collective understanding of supply chain risks, minimizing disruptions, and ensuring the availability of skilled works in critical sectors. But these goals, many of which mirror the initial negotiating mandate of this pillar, do not  appear to be translated into rules, commitments or initiatives.   

“Rather, the announcement focuses on three new bodies to help flesh out and operationalize the objectives, including a Council, a crisis response mechanism, and a labor advisory board. In essence, the IPEF members have established a framework within a framework to address supply chain concerns, with much of the substantive work yet to be discussed and agreed upon.  Curiously, the new bodies are ‘contemplated,’ and apparently not yet agreed upon, suggesting that there were some last-minute hitches in even setting up this structure.

“Finally, the Fair Economy pillar points to ‘good progress’ on negotiation of the text on anticorruption and tax matters. Based on this characterization, this pillar’s work is likely to be the next candidate for an early harvest agreement.”

USIBC Plans 2023 India Ideas Summit In Washington

The summit will explore the U.S.-India economic partnership across sectors.
The United States India Business Council (USIBC) announced that its 2023 India Ideas Summit will be held on June 12-13, 2023 on the sidelines of its 48th Annual General Meeting at the U.S. Chamber of Commerce headquarters in Washington D.C.
In a statement, USIBC shared the summit themed ‘Trust, Resilience, and Growth’ – will focus on how these three organizing principles underpin the U.S.-India economic partnership across sectors. “As the Summit is the flagship event of USIBC, and the premier convention of government, industry, and thought leaders in the U.S.-India Corridor, USIBC’s annual India Ideas Summit has become an institution,”it said.
This year’s summit carries an additional significance as it will take place about ten days in advance of PM Modi’s state visit to the US scheduled to begin from June 22, 2023, in an effort to strengthen bilateral relations.
Every year, the bilateral trade council hosts conversations that explore important technological developments, chart an agenda for the trade relationship, and highlight how India-US commercial ties serve shared strategic and economic interests.\
Formed in 1975 at the request of the U.S. and Indian governments, the U.S.-India Business Council is the premier business advocacy organization in the U.S.-India corridor, composed of more than 200 top-tier U.S. and Indian companies advancing U.S.-India commercial ties. The Council aims to create an inclusive bilateral trade environment between India and the United States by serving as the voice of industry, linking governments to businesses, and supporting long-term commercial partnerships that will nurture the spirit of entrepreneurship, create jobs, and successfully contribute to the global economy.

India Emerges As Top Alternative To China For MNCs

IMA India recently disclosed through its 2023 Global Operations Benchmarking survey that nearly 80 percent of global CEOs choose India as their top destination over China.

The 2023 Global operations benchmarking survey, conducted by IMA India, showed the country as an emerging destination for MNCs. A poll of 100 CEOs who largely represent international B2B-focused companies stated that India is the top destination that multinational enterprises are looking for as an alternative to China.

As per the study, 88 per cent of CEOs who surveyed companies with a presence in India, chose India as their top option over China due to its growing geopolitical aggressiveness, dubious trade and commercial practices, and rising labour prices.

“In the last five years, foreign MNCs have increased their on-ground presence in India, partly as a result of diversification away from China. In particular, the IT & ITES companies are ramping up the share of their global workforce that is based in India,” said Suraj Saigal, Research Director, IMA India.

In the last three years, over 70 per cent of the companies, according to a study based on the poll, have seen significant changes in their business strategy based on-the-ground operations in China. Comparatively speaking, the industrial sector exhibits a more pronounced pullback than the services sector. The percentage of people making adjustments has declined in 41 per cent of cases, while 56 per cent have cut down on investments and sourced less from China.

While a handful of enterprises have quit the industry, 6 per cent have reduced their market participation. In addition, taking into consideration recent changes in commercial and geopolitical tactics, the study looked at how corporations are recognising and seizing India’s business possibilities.

India’s predicted worldwide workforce share climbed from 22.4 per cent to 24.9 per cent between FY18 and FY23 in mean percentage terms, while its revenue share increased from 14.8 per cent to 15.8 per cent. These numbers show India’s gradual rise in the world scene throughout this time.

However, even those that choose India listed infrastructure, legal restrictions, and skill-related problems as major obstacles. The study determined that the worldwide trend away from multilateral commerce towards bilateral trade connections was the cause for the rising popularity of friend-shoring. The emergence of ‘deglobalization,’ protectionism, and nationalism has forced governments to cooperate with nations with which they already have cordial bilateral connections rather than depending on international or regional trade accords.

Biden Signs Debt Ceiling Bill, Averting Government Shut Down

President Joe Biden on Saturday, June 3rd signed the debt ceiling bill, a capstone to months of negotiations that pushed the U.S. to the brink of default. Biden signed H.R. 3746, the “Fiscal Responsibility Act of 2023,” two days before Monday’s default deadline, on which the U.S. would run out of cash to pay its bills, according to a White House release.

Biden thanked House Speaker Kevin McCarthy, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell “for their partnership.” Biden tweeted: “I just signed into law a bipartisan budget agreement that prevents a first-ever default while reducing the deficit, safeguarding Social Security, Medicare, and Medicaid, and fulfilling our scared obligation to our veterans. Now, we continue the work of building the strongest economy in the world.”

The House of Representatives and the Senate passed the legislation this week after Biden and House of Representatives Speaker Kevin McCarthy reached an agreement following tense negotiations.

The Treasury Department had warned it would be unable to pay all its bills on Monday if Congress had failed to act by then.

Biden, who had experienced the 2011 debt limit crisis, refused to make any concessions for what he considered Congress’s basic duty. However, McCarthy, encouraged by conservatives seeking significant changes to federal spending, was determined to use the nation’s borrowing power as leverage, even if it risked pushing the U.S. towards default.

The ensuing events demonstrated how two influential figures in Washington, both of whom believe in the importance of personal connections despite not having a strong relationship themselves, managed to prevent an unprecedented default that could have seriously damaged the economy and carried unpredictable political repercussions.

However, the standoff was primarily provoked by Republicans who believed that threatening the debt limit was necessary to curb federal spending. Despite a decisive 314-117 House vote and a 63-36 Senate vote, this episode has put McCarthy’s speakership to the test and challenged his capacity to control his party’s rebellious far-right faction.

“IT’S ALL ABOUT THE ENDGAME”

McCarthy now feels empowered and remains undaunted. Reflecting on his election as speaker after the House passed the debt limit package, he mentioned his arduous journey to secure the gavel in January. He stated, “Every question you gave me (was), what could we survive, what could we even do? I told you then, it’s not how you start, it’s how you finish.”

This narrative of the prolonged process through which Washington resolved the debt limit crisis is based on interviews with legislators, senior White House officials, and high-ranking congressional aides, some of whom requested anonymity to disclose private negotiation details.

Key to overcoming the obstacles were Biden and McCarthy’s five negotiators, who brought policy expertise to the table and received full support from their leaders. Republicans particularly appreciated the involvement of presidential counselor Steve Ricchetti, who speaks on behalf of Biden like no one else, and Shalanda Young, the current director of the Office of Management and Budget, who gained invaluable experience as a respected senior congressional aide overseeing the intricate annual appropriations process.

Young and Rep. Patrick McHenry of North Carolina, one of McCarthy’s negotiators, developed such a close rapport that they phoned each other every morning during their respective day care drop-offs. Additionally, Young and the other GOP negotiator, Rep. Garret Graves, playfully debated who had the better gumbo recipe while discussing the debt limit during a White House celebration for the national champion Louisiana State University women’s basketball team.

The five negotiators – Graves, McHenry, Ricchetti, Young, and legislative affairs director Louisa Terrell – convened daily in an elegant office on the Capitol’s first floor, adorned with frescoes by 19th-century muralist Constantino Brumidi. In these meetings, they focused intently on priorities and non-negotiables to determine how they could reach an agreement.

HITTING PAUSE AND A ‘BACKWARD’ PROPOSAL

By May 19, the negotiations were becoming shaky. Republicans grew impatient as the White House seemed unwilling to compromise on reducing federal spending, which was a non-negotiable demand for the GOP.

During a morning meeting that Friday, White House officials urged McHenry and Graves to present a formal proposal. However, the frustrated Republicans opted to go public instead. They informed reporters that the talks had temporarily halted. As he hurried through the Capitol, Graves said, “We decided to press pause because it’s just not productive.” He later explained that he and McHenry were tired of playing games.

Tensions didn’t subside. When negotiations resumed that night, McHenry and Graves presented a new proposal that not only revived numerous rejected provisions from the GOP’s debt limit bill but also incorporated the House Republicans’ border-security bill. A White House official labeled the proposal “regressive.”

The White House expressed its own frustrations as the discussions seemed to be faltering, starting with a lengthy statement from communications director Ben LaBolt and followed by Biden’s comments at a press conference in Hiroshima, Japan, where he was attending a summit of leading democracies. The president stated, “Now it’s time for the other side to move their extreme positions. Because much of what they’ve already proposed is simply, quite frankly, unacceptable.”

HOPE, LONG HOURS, AND GUMMY WORMS

Despite the escalating public rhetoric, there were indications that the talks were improving. Biden called McCarthy from Air Force One as he left Japan, and the speaker appeared more hopeful than he had been in days. Fueled by coffee, gummy worms, and burritos, negotiators worked exhausting hours, primarily at the Capitol but once at the Eisenhower Executive Office Building, where they enjoyed Call Your Mother bagel sandwiches provided by White House Chief of Staff Jeff Zients.

One session lasted until 2:30 a.m., and Graves showed reporters an app tracking his sleep, revealing an average of three hours per night during the final stretch. McCarthy sent lawmakers home over Memorial Day weekend, which McHenry believed was helpful. He said, “The tone of the White House negotiators became much more serious and much more grounded in the realities they were going to have to accept.”

PROMOTING THE AGREEMENT

On May 27, Biden and McCarthy announced a deal in principle and began the task of convincing others. The night before the vote, McCarthy assembled House Republicans in the Capitol’s basement, provided pizza, and explained the bill while challenging Freedom Caucus members to use the same aggressive language they had employed at an earlier news conference. By the meeting’s end, it was evident that McCarthy had quelled the rebellion.

Meanwhile, the White House had its work cut out for them in appeasing rank-and-file Democrats. Biden and McCarthy displayed contrasting styles throughout the negotiations, with the speaker discussing the debt limit talks openly and frequently, while the president remained quiet, wary of jeopardizing the deal before it was finalized.

Biden had been privately addressing his party’s concerns even as the agreement was being finalized. After the Congressional Progressive Caucus criticized the few known details, particularly regarding stricter requirements for federal safety-net programs, Rep. Pramila Jayapal received a call from Biden. He assured her that his negotiators were working diligently to minimize the Republican-drafted changes to food stamp and cash assistance programs.

In a statement after the vote, Biden expressed gratitude and relief, saying, “This budget agreement is a bipartisan compromise. Neither side got everything it wanted. That’s the responsibility of governing.”

Top Battery Stocks Set to Thrive as Global EV Demand Skyrockets and Lithium Prices Rebound

Leading battery stocks are set to stand out as the demand for electric vehicles surges. The International Energy Agency predicts that one in every five cars globally will be electric this year, significantly impacting EV battery demand.

In fact, Fortune Business Insights estimates that the global EV battery market could expand from $37.9 billion in 2021 to nearly $98.9 billion by 2029, benefiting these three battery stocks.

Albemarle (ALB)

A prime investment opportunity in the electric vehicle battery boom lies in lithium stocks, such as Albemarle (NYSE:ALB). Firstly, the company announced a $1.3 billion investment in a new lithium hydroxide plant in South Carolina to address battery demand. Secondly, the facility is expected to generate around 50,000 metric tons of battery-grade lithium, with the capacity to double production.

Thirdly, this output could facilitate the manufacturing of 2.4 million electric vehicles annually. Adding to the potential growth, lithium prices are recovering. Citigroup analysts even suggest that the downturn in lithium prices may have ended, with an anticipated increase of up to 40% by year-end.

Furthermore, Albemarle has now partnered with Ford, providing battery-grade lithium hydroxide for the automaker’s EVs. Under the agreement, Albemarle will supply over 100,000 metric tons of battery-grade lithium hydroxide to power roughly 3 million future Ford EV batteries. The five-year supply contract commences in 2026 and runs through 2030.

Solid Power

Although the chart might not look promising, Solid Power (NASDAQ:SLDP) should not be dismissed. Needham analysts recently reinstated their buy rating for the stock with a $5 price target, referring to SLDP as a “well-funded call option.” Solid Power is also working to strengthen its partnership with BMW (OTCMKTS:BMWYY) through a joint development agreement, which contributed to the company’s $3.8 million revenue in Q1 2023, an increase of $1.6 million YoY.

Moreover, the company has two significant milestones this year: anticipated improvements in key cell performance metrics and the expected delivery of EV cells to partners by late 2023.

Amplify Lithium & Battery Technology ETF (BATT)

With a 0.59% expense ratio, the Amplify Lithium & Battery Technology ETF (NYSEARCA:BATT) offers investors access to international companies involved in lithium battery technology.

As lithium prices recover, the BATT ETF is also gaining momentum. In fact, with the aggressive increase in lithium prices, the BATT ETF has risen from a recent low of $11.60 to $12.59 per share. Moving forward, it would be ideal for the BATT ETF to retest the $14 per share mark.

High-Income Earners Struggle with Pay check-to-Pay check

Despite a slight easing in inflation, a considerable number of consumers continue to feel the pinch. The proportion of adults who feel financially stretched remained nearly constant at 61% as of April, as per a recent LendingClub report.

Interestingly, the report reveals that high-income earners are experiencing increased pressure. Among those with six-figure incomes, 49% now live paycheck to paycheck, up from 42% last year. On the other hand, individuals earning less than $100,000 saw either a steady percentage or a decline in those living paycheck to paycheck during the same period.

Your financial status might be influenced by where you reside

Anuj Nayar, LendingClub’s Financial Health Officer, explains that “a $100,000 income may not stretch that far” depending on your location. A separate study by SmartAsset examined how far a six-figure salary stretches in the 25 largest cities in the United States. In New York City, for instance, $100,000 is equivalent to just $35,791 after accounting for taxes and the high cost of living.

In contrast, a $100,000 salary goes much further in Memphis, equating to approximately $86,444 thanks to a lower cost of living and no state income tax. LendingClub found that 69% of city dwellers live paycheck to paycheck, which is 25% more than their suburban counterparts. Nayar highlights, “where you live appears to be almost equally important in factoring whether a consumer is living paycheck to paycheck.”

Rising mortgage rates, home prices, and rents in many cities across the country contribute to these financial challenges, as evidenced by the latest data from rental listings site Rent.com. As of the previous month, 29 of the 50 most populous U.S. cities registered year-over-year rent increases.

Jon Leckie, a researcher for Rent.com, notes that compared to two years ago, rents have surged by over 16%—equivalent to a $275 hike in monthly rent bills. He adds, “That kind of growth over such a short period of time is going to put a lot of pressure on pocket books.”

Escaping the paycheck-to-paycheck cycle

It can be challenging, especially for high earners and city dwellers who often fall victim to “lifestyle creep,” according to Carolyn McClanahan, CFP and founder of Life Planning Partners in Jacksonville, Florida.

As people’s incomes increase, their spending habits tend to follow suit, particularly when it comes to dining out, using food delivery services like DoorDash, and subscribing to additional services. McClanahan warns that it’s easy to “fall into the trap of too much convenience spending.”

To overcome this cycle, McClanahan, who is also a member of CNBC’s Advisor Council, recommends evaluating convenience spending and identifying areas that don’t bring value. She advises, “the first thing to do is look at convenience spending and figure out ways to cut the spending that is not bringing them value.” Redirect the money saved from cutting unnecessary expenses towards building an emergency fund.

Once you’ve accumulated three to six months’ worth of expenses in your emergency fund, shift your focus to saving for other financial goals.

Report Reveals Staggering Disparity Among Global Top 1%: Monaco Tops the List, India Ranks 22nd

Many people associate wealth with owning a luxurious home, an extravagant car, and other valuable possessions. However, the top one per cent of the world’s wealthiest individuals possess far more than most can fathom.

Global real estate consulting firm Knight Frank recently published its updated Wealth Report, which discloses the amount of wealth required to become part of the elite one per cent in various countries. Monaco leads the pack, where entering the top tier necessitates a net worth of at least eight figures. According to Knight Frank’s findings, the starting point for Monaco’s wealthiest one per cent is $12.4 million.

Wondering about India? The country ranks 22nd on the list of 25 nations featured in the wealth report, with a minimum requirement of $175,000 (Rs 1.44 crore) to join the top one per cent. India places higher than South Africa, the Philippines, and Kenya.

Knight Frank’s 2022 report highlights that the number of ultra-high-net-worth individuals in India grew by 11 per cent, driven by thriving equity markets and a digital revolution. Among Asian countries, Singapore boasts the highest entry threshold, with $3.5 million needed to join the top one per cent, slightly ahead of Hong Kong’s $3.4 million.

Forbes’ 2023 list of billionaires includes 169 Indians, up from 166 the previous year. Mukesh Ambani retains his title as the richest person in both India and Asia, despite an eight per cent decrease in his wealth over the past year.

Knight Frank’s findings emphasize how the pandemic and rising living expenses have exacerbated the divide between affluent and impoverished nations. The entry-level for Monaco’s wealthiest is over 200 times greater than the $57,000 required to be part of the top one percent in the Philippines, which ranks among the lowest in Knight Frank’s study.

IRS To Launch Free Online Tax-Filing System

The IRS has revealed plans to initiate a trial of a complimentary, direct online tax-filing system for the 2024 tax season. This decision is based on significant taxpayer interest and a relatively low cost associated with the system.

In their eagerly awaited report, the IRS disclosed that they have developed a prototype system which will be introduced through a pilot program. The program will involve a limited number of taxpayers and offer restricted functionality, enabling the Treasury Department to assess how users engage with the system, according to IRS and Treasury officials.

Laurel Blatchford, who leads the Treasury Department’s office responsible for implementing the Inflation Reduction Act, stated, “Dozens of other countries have provided free tax-filing options to their citizens, and American taxpayers who want to file their taxes for free online should have an acceptable option.”

The Inflation Reduction Act increased IRS funding by $80 billion and mandated the agency to evaluate the feasibility of a direct tax-filing system. If implemented, this program could potentially allow taxpayers to prepare and submit their taxes without relying on popular tax preparation companies, which have invested millions to oppose similar proposals in the past.

IRS considers revamping tax filing process

The IRS has identified a strong demand for a complimentary tax-filing service, now referred to as “Direct File.” Laurel Blatchford mentioned, “Seventy percent of the public is interested in a free option deployed by the IRS, so we think there will be excitement there.” The Treasury Department’s decision to proceed with the pilot program was influenced by evident taxpayer interest.

An IRS-conducted survey revealed that 72 percent of taxpayers expressed high or moderate interest in using the direct file service. Additionally, 68 percent of those who prepare their returns stated they would be highly or moderately likely to switch to the IRS’s free online tool.

Significant impact with minimal expected cost

The report estimates the direct file system’s cost to be only a small portion of the $80 billion budget increase the IRS obtained through the Inflation Reduction Act, most of which is designated for enhanced enforcement capabilities. The report found that “Annual costs of Direct File may range from $64 million (assuming 5 million users and a narrow scope of covered tax situations) to $249 million (assuming 25 million users and a broad scope of covered tax situations).”

Funding for this initiative will be sourced from the IRS’s technology and products budget, as well as its customer support budget. IRS Commissioner Danny Werfel also suggested that systems modernization funds allocated in the Inflation Reduction Act could be utilized to strengthen the system.

Understanding Direct File

The report suggests that taxpayers’ confidence in using the IRS system stems from the fact that the IRS already has access to their personal information. However, Danny Werfel, the IRS Commissioner, stated that the direct file prototype would not likely utilize pre-populated forms to further automate interactions with government software, explaining, “Given that it will be limited in scope, we do not expect pre-population or predetermining tax obligations to be part of it.”

This implies that the prototype software will likely adopt a question-and-answer format, similar to many commercial software options, as indicated by the IRS’s recent strategic operating plan for its expanded budget.

Direct File eligibility

Tuesday’s report outlines various scenarios that the Direct File system could accommodate, ranging from basic wage income taxed with the standard deduction to more complex situations involving state returns. Werfel mentioned that the pilot program would further determine the specific taxpayer cases that could utilize the system.

With nearly 90% of all filers using the standard deduction and wages and salaries being taxed at 99% compliance, the Direct File system might handle the majority of common tax situations. This has led to recommendations for a direct file option from the Government Accountability Office, the National Taxpayer Advocate, and numerous tax experts over the years.

Since the early 2000s, the IRS’s Free File program, an agreement between the IRS and a group of private tax preparation companies, has offered free commercial software to lower-income individuals. However, only a small percentage of eligible taxpayers have used it, resulting in accusations of deceit and a $141 million settlement paid by TurboTax maker Intuit to taxpayers across nine states.

Lawmakers’ opinions on IRS e-filing

Rep. Brad Sherman (D-Calif.) wrote a letter to Werfel this week, encouraging the adoption of an e-filing program and stating, “The IRS established the free e-filing program in 2003, but it did so in partnership with major tax preparation software companies that frequently mislead taxpayers into paying for their services.”

Werfel recently asserted that his agency has the legal authority to proceed with the report’s conclusions, despite opposition from Senate Finance Committee Republicans. He also mentioned being open to other legal interpretations if questions about authority arise.

Both Republican and Democratic administrations have supported the idea of more direct tax filing methods in the past. Kitty Richards, former director of State and Local Fiscal Recovery Funds at the U.S. Department of the Treasury, highlighted proposals from Presidents Ronald Reagan and George W. Bush for voluntary return-free systems and an easy, no-cost online filing option, respectively. However, she noted that the tax preparation industry recognized the threat a free government tax preparation and filing process would pose to their profits.

Global Economies Seek to Break Free from US Dollar Dominance

Nations worldwide are embarking on an irreversible course to break away from the US dollar, according to seasoned investment expert Matthew Piepenburg. In a recent interview at the Deutsche Goldmesse conference with the Soar Financially YouTube channel, Piepenburg, partner at emerging markets-focused Matterhorn Asset Management, claims that major economies are now evidently trying to distance themselves from dollar dominance.

He asserts that the US Federal Reserve’s interest rate hikes are driving countries like China and Russia to adopt settlement systems that don’t depend on the USD. In addition to China and Russia, both members of the BRICS coalition, Piepenburg reveals that 41 other nations are following suit, possibly concerned about how the US has treated Russia during its conflict with Ukraine.

Piepenburg explains, “So when that dollar gets higher, because Powell is raising the rates, that becomes more onerous and painful for the rest of the world and they begin to break ranks.” He further adds, “Asia in general, China and Russia in particular are very big rank-breaking nations. And, of course, they’re bringing 41 other countries alongside to have trade settlements outside the US dollar.”

The BRICS group, representing the economically-aligned nations of Brazil, Russia, India, China, and South Africa, is considering launching a global currency that does not rely on the US dollar. Several nations reportedly want to participate, including Saudi Arabia, Iran, Argentina, the United Arab Emirates, Algeria, Egypt, Bahrain, Indonesia, two unnamed East African countries, and one from West Africa.

While Piepenburg doesn’t foresee the yuan or any other currency replacing the dollar as the world reserve currency in the near future, he does identify a “clear trend” of countries worldwide bypassing the dollar as the primary, trusted medium of trade. He concludes, “The clear trend of breaking ranks with the US dollar as a trusted, reliable, dependable trade currency and payment system is now I think irrevocable.”

The World Health Organization (WHO) advises against using sugar substitutes for weight loss, as new guidelines reveal that non-sugar sweeteners (NSS) do not provide long-term benefits in reducing body fat for adults or children. Francesco Branca, director of WHO’s Department of Nutrition and Food Safety, stated, “Replacing free sugars with non-sugar sweeteners does not help people control their weight long-term.” The guidance applies to everyone except those with preexisting diabetes.

While the review identified potential undesirable effects from long-term sugar substitute use, such as a mildly increased risk of type 2 diabetes and cardiovascular diseases, Branca clarified that the recommendation doesn’t comment on the safety of consumption. He added, “What this guideline says is that if we’re looking for reduction of obesity, weight control or risk of noncommunicable diseases, that is unfortunately something science been unable to demonstrate.”

The Deadline Looms For Debt Ceiling

The US federal government is on the brink of being unable to make debt payments, and it’s up to Congress to vote on raising the nation’s borrowing cap, also known as the debt limit. However, House Speaker Kevin McCarthy (R-Calif.) and President Biden are currently at odds over Republican demands to link the debt limit to spending caps and other policy requirements. Treasury Secretary Janet Yellen has cautioned that the country could exhaust its borrowing authority by June 1, leaving little time for negotiators to reach a consensus.

In a recent meeting with McCarthy, House Democratic Leader Hakeem Jeffries (D-N.Y.), Senate Majority Leader Chuck Schumer (D-N.Y.), and Senate Minority Leader Mitch McConnell (R-Ky.), Biden aimed to find a way forward. Although they didn’t reach an agreement, staff-level discussions continue in an attempt to avert default.

Debt ceiling

You might have some questions about the debt ceiling and the ongoing debate. The debt ceiling, or debt limit, is a restriction on the amount of debt the federal government can accumulate. As Jason Furman, a former economic advisor to President Obama and current economics professor at Harvard, explains, “It used to be that every time you did a Treasury auction where you borrowed, Congress would pass a new law just for that one auction.” However, in 1917, during World War I, Congress opted for a more streamlined approach, allowing the government to borrow up to a specified amount before needing to request an increase. Since 1960, Congress has raised or suspended the debt limit 78 times, according to the Treasury Department.

How do experts know when the government has really run out of funds?

Picture : NBC

Experts determine when the government is nearing its funding limit by examining expected tax revenue, the timing of those payments arriving in Treasury accounts, and scheduled debt payments. This analysis helps establish a timeframe, referred to as an X-Date, when the debt authority might be depleted.

Nonetheless, the Treasury Department has several options, known as extraordinary measures, to prevent default. These measures involve reallocating investments and using accounting techniques to redistribute funds. The federal government technically reached the debt limit in January, but these extraordinary measures have maintained payment flows since then. While experts cannot pinpoint an exact date for when funds will be exhausted, they can estimate a general range, which currently falls between early June and potentially as late as July or August.

Why is there a fight over it?

Debt has generally been viewed unfavorably in American politics, and lawmakers often hesitate to be seen as endorsing more federal borrowing or spending. Additionally, they tend to attach unrelated priorities to must-pass legislation, making the debt limit a prime target for political disputes.

As Maya MacGuineas, president of the Committee for a Responsible Federal Budget, explains, “Everybody uses [bills to increase] the debt ceiling for their favorite policies.” The real issue arises when discussions about defaulting become more serious. Historically, votes to raise the debt limit were relatively uneventful; however, the situation changed in 2011 when the US came dangerously close to default.

Mark Zandi, an analyst at Moody’s Analytics, notes that while there have been previous political battles over the debt, none were as risky or significant as the 2011 conflict. At that time, Republican House Speaker John Boehner (R-Ohio) and President Obama were in a standoff over spending. Republicans demanded deep spending cuts and caps on future spending growth, while Obama insisted on raising the debt limit without any extraneous policies – a clean increase.

Ultimately, Congress reached an agreement to increase the debt limit along with caps on future spending, but not before Standard & Poor’s downgraded the nation’s debt for the first time in history. Today’s situation bears a striking resemblance to the 2011 political struggle, raising serious concerns about the possibility of a default.

What could happen if it’s not raised?

If the debt ceiling is not raised, the Treasury Department would be unable to fulfill its due payments, resulting in a default. This would occur regardless of the type or size of the missed payment.

Some Republicans have proposed a system called payment prioritization, in which certain debts are selected for repayment. However, this would require Congress to pass new legislation, which is politically improbable. Moreover, most experts believe that implementing such a system could be practically unfeasible, and it is not currently being considered as a serious solution.

Has the U.S. ever failed to make these debt payments?

No, the U.S. has never failed to make its debt payments. This reliability is a significant reason why the federal government can easily sell Treasury bonds to investors worldwide and why the U.S. dollar is one of the most trusted currencies.

As MacGuineas points out, “Treasuries are the debt vehicle that are most trusted in the entire world, even if there is an economic crisis that originated in the U.S., people come and buy treasuries because they trust them.” If that trust is jeopardized due to a default or missed interest payment, the U.S. would likely struggle to regain its previous status as the world’s most trusted debtor.

Would capping or cutting spending now resolve the problem?

No, capping or cutting spending now would not resolve the problem, as the debt limit pertains to money already spent due to laws previously passed by Congress. Furman emphasizes that “this borrowing isn’t some unilateral thing that President Biden wants to do… It is in order to accomplish what Congress told him to accomplish.”

Some of the current debt accumulation even results from laws enacted under former presidents, such as Donald Trump. Spending caps and other changes proposed by House Republicans are separate policies designed to address future debt accumulation rather than the immediate need to raise the debt limit.

What else could be affected by a default?

The possibility of a U.S. default may result in a domino effect of negative outcomes across the worldwide financial landscape. The nation’s credit rating could suffer long-term damage, diminishing the value of U.S. treasuries and making it a less attractive investment destination. MacGuineas expressed deep concern, stating, “I am truly concerned there is an actual chance of default and that is so dangerous and such a sign that the U.S. is not able to govern itself in a way that is functioning.”

Zandi cautioned that the fallout might extend beyond merely investment and borrowing rates. He advised, “Don’t worry about your stock portfolio, worry about your job,” emphasizing the potential loss of employment and increased unemployment rates. He added, “This will certainly push us and, you know, it’s going to be about layoffs. Stock portfolios will be the least of people’s worries.”

Furman compared the potential crisis to the 2008 financial meltdown caused by Lehman Brothers Bank’s collapse, suggesting it could be even more severe. “It could be worse than Lehman Brothers, where everyone basically demands their money back because they don’t believe the collateral anymore,” he explained. “And you have the equivalent of a run on the global financial system.”

Is default the same thing as a shutdown?

Default and shutdown are not the same thing. A government shutdown transpires when Congress does not pass annual spending bills before the fiscal year concludes on September 30. Although these two matters may be connected at times, this is because legislators have, on occasion, deliberately synchronized the debt limit extension with the end of the fiscal year to prompt more comprehensive spending debates in conjunction with debt authorization.

Are there other ways this problem could be fixed, aside from just increasing the debt limit?

Apart from merely raising the debt limit, there are alternative solutions to address the issue, as the existing process is widely considered ineffective. MacGuineas from the Committee for a Responsible Federal Budget believes that while Congress should reassess debt and spending priorities, the current debt limit mechanism fails to compel them to make decisions. She stated, “The debt ceiling is a terrible way to try to impose fiscal responsibility,” describing it as a “dumb approach.”

Instead, MacGuineas proposes a system where the debt limit is increased in line with the passage of legislation by Congress. Some economists have even suggested eliminating the debt limit entirely.

Other less conventional ideas involve minting a $1 trillion platinum coin to cover the debt or elevating the limit to such an extent that subsequent debates would be postponed for years or even decades.

India Phases Out ₹2,000 Notes, Sets September 30 Deadline for Exchange

New Delhi: The Reserve Bank of India (RBI) has announced its decision to phase out ₹ 2,000 notes and has set a deadline of September 30 for people to exchange or deposit them in their bank accounts. Starting May 23, the RBI’s 19 regional offices and other banks will accept ₹ 2,000 notes in exchange for lower denomination currency. It is important to note that these notes will continue to be considered legal tender, as stated by the RBI.

The RBI has instructed all banks to cease issuing ₹ 2,000 notes with immediate effect.

The introduction of the ₹ 2,000 note took place in November 2016 after Prime Minister Narendra Modi’s sudden demonetization move, which rendered high-value ₹ 1,000 and ₹ 500 notes invalid overnight.

The RBI explained its decision, stating, “The purpose of introducing ₹ 2,000 banknotes was fulfilled once banknotes of other denominations became sufficiently available. Consequently, the printing of ₹ 2,000 banknotes was discontinued in 2018-19.”

To ensure convenience and minimize disruption to regular banking operations, the RBI has allowed the exchange of ₹ 2,000 notes for lower denomination notes, up to a limit of ₹ 20,000 at a time, at any bank beginning May 23, 2023. This facility will be available until September 30, allowing individuals to either exchange or deposit their ₹ 2,000 notes.

Sources informed NDTV that the RBI might extend the deadline beyond September 30 if necessary. However, even after the current deadline, ₹ 2,000 notes will remain valid as legal tender.

The RBI highlighted that approximately 89% of ₹ 2,000 denomination banknotes were issued before March 2017 and are reaching the end of their expected lifespan of four to five years. The total value of these notes in circulation decreased from ₹ 6.73 lakh crore at its peak on March 31, 2018 (comprising 37.3% of the currency in circulation) to ₹ 3.62 lakh crore, representing only 10.8% of the currency in circulation as of March 31, 2023.

The central bank emphasized that the ₹ 2,000 note is not commonly used for transactions. Similar measures were taken by the RBI in 2013-2014 when certain notes were phased out of circulation.

How America Sustains High Deficits Without Economic Collapse

The United States has consistently maintained a high trade deficit for decades, raising questions about how the country manages to avoid economic repercussions that typically accompany such imbalances. This article delves into the factors that enable the US to sustain these high deficits without experiencing financial collapse.

Picture : The Blance

One of the primary reasons the US can maintain high trade deficits is the dominance of the US dollar as the world’s reserve currency. Central banks across the globe hold their foreign exchange reserves in dollars, contributing to the currency’s stability and demand. This status allows the US to run persistent trade deficits without causing a depreciation in its currency value.

Another factor that enables the US to support high trade deficits is the inflow of foreign investments. International investors view the US as a safe haven for their capital due to the country’s strong and stable economy. These investments help finance the trade deficit by providing an influx of foreign funds, which offsets the negative effects of the deficit on the US economy.

The US economy is driven primarily by domestic consumption, which accounts for approximately 70% of its GDP. This strong demand for goods and services helps offset the trade deficit by creating a robust market for imports. As a result, the US can continue importing goods from other countries without significantly harming its own industries.

The US is a global leader in innovation and technological advancements, which contribute to the country’s overall economic strength. These innovations attract foreign investments and facilitate the export of high-value goods and services, such as software, pharmaceutical products, and aerospace technology. This, in turn, helps to mitigate the impact of the trade deficit on the US economy.

The US government’s fiscal policies also play a role in managing the trade deficit. By implementing policies that promote economic growth, the government can stimulate demand for goods and services. Additionally, the US Federal Reserve’s monetary policies influence interest rates and the money supply, which can impact the trade deficit indirectly.

Despite maintaining a high trade deficit, the United States has managed to avoid the economic pitfalls often associated with such imbalances. Factors such as the US dollar’s status as a global reserve currency, foreign investment, strong domestic demand, innovation, and government fiscal policies all contribute to the country’s ability to sustain these deficits. However, it is essential to continue monitoring the trade deficit and its potential long-term impacts on the US economy.

Turbotax Customers Can Claim $141M Settlement Money

(AP) — Millions of Americans who qualified for free tax services — but were instead deceived into paying TurboTax for their returns — will soon get settlement checks in the mail.

In a settlement last year, TurboTax’s owner Intuit Inc. was ordered to pay $141 million to some 4.4 million people across the country. Those impacted were low-income consumers eligible for free, federally-supported tax services — but paid TurboTax to file their federal returns across the 2016, 2017 and 2018 tax years due to “predatory and deceptive marketing,” New York Attorney General Letitia James said.

All 50 states and the District of Columbia signed the May 2022 settlement, which was led by James.

Consumers eligible for restitution payments do not need to file a claim, the New York Attorney’s General Office said Thursday. They will be notified by an email from Rust Consulting, the settlement fund administrator, and receive a check automatically.

Checks will be mailed starting next week, and continue through the month of May. The amount paid to each eligible consumer ranges from $29 to $85 — depending on the number of tax years they qualify for.

“TurboTax’s predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal duties to file their taxes,” James said in a Thursday statement. “Today we are righting that wrong and putting money back into the pockets of hardworking taxpayers who should have never paid to file their taxes.”

At the time of the May 2022 settlement, James said her investigation into Intuit was sparked by a 2019 ProPublica report that found the company was using deceptive tactics to steer low-income tax filers away from the free, federal services they qualified for — and toward its own commercial products instead.

Under the terms of last year’s settlement, Intuit Inc. agreed to suspend TurboTax’s “free, free, free” ad campaign. According to documents obtained by ProPublica, Intuit executives were aware of the impact of advertising free services that were actually not free for everyone.

“The website lists Free, Free, Free and the customers are assuming their return will be free,” an internal company PowerPoint presentation said, per ProPublica. “Customers are getting upset.”

When contacted by The Associated Press on Friday, Inuit pointed to the company’s May 2022 statement following the settlement agreement.

“Intuit is pleased to have reached a resolution with the state attorneys general that will ensure the company can return our focus to providing vital services to American taxpayers today and in the future,” Kerry McLean, Intuit’s executive vice president and general counsel, said at the time.

Biden Administration Warns About Growing Risks Of Medical Loans And Medical Credit Cards

The Biden administration has issued a warning to Americans concerning the financial risks associated with medical credit cards and other loans for medical bills. In a recent report, the Consumer Financial Protection Bureau (CFPB) estimated that Americans paid $1 billion in deferred interest on medical credit cards and other medical financing between 2018 and 2020. The agency found that interest payments can increase medical bills by almost 25 percent, which can deepen patients’ debts and threaten their financial security.

CFPB’s Director, Rohit Chopra, stated that “lending outfits are designing costly loan products to peddle to patients looking to make ends meet on their medical bills. These new forms of medical debt can create financial ruin for individuals who get sick.” Nationally, KFF Health News found that approximately 100 million people, including 41 percent of adults, have healthcare debt. This large scale problem is feeding a multibillion-dollar patient financing business, with private equity and big banks looking to capitalize on the situation when patients and their families are unable to pay for care. The profit margins in the patient financing industry top 29 percent, according to research firm IBISWorld, which is seven times what is considered a solid hospital profit margin.

One of the most prominent financing options is credit cards like CareCredit offered by Synchrony Bank which is often marketed in physician and dentist waiting rooms to help pay off medical bills. These cards typically offer a promotional period where patients pay no interest, but if the patient missed a payment or could not pay off the loan during the promotional period, they could face interest rates that rise as high as 27 percent, according to the CFPB. Patients are also increasingly drawn into loans administered by financing companies such as AccessOne.

These loans, which often replace no-interest instalment plans that hospitals once commonly offered, can add hundreds or thousands of dollars in interest to the debts patients owe. Hospital and finance industry officials insist that they take care to educate patients about the risks of taking out loans with interest rates. However, federal regulators have found that many patients remain confused about the terms of the loans.

According to the CFPB, the risks are particularly high for lower-income borrowers and those with poor credit. About a quarter of people with a low credit score who signed up for a deferred-interest medical loan were unable to pay it off before interest rates jumped. By contrast, just 10% of borrowers with excellent credit failed to avoid the high interest rates. Regulators found that many patients remained confused about the terms of the loans and that patients often didn’t fully understand the products’ terms and found themselves in crippling financing arrangements.

Despite this, the new CFPB report does not recommend new sanctions against lenders. The study cautioned that the system still traps many patients in damaging financing arrangements. It also stated that “consumers complain that these products offer confusion and hardship rather than benefit, as claimed by the companies offering these products.” The report concluded that “many people would be better off without these products.”

The growth of patient financing products pose risks to low-income patients. Patients should be offered financial assistance to pay large medical bills, but instead, they are funnelled into credit cards, debt consolidations or personal loans that pile interest on top of medical bills they cannot afford.

An investigation conducted by KFF Health News with NPR explored the scale and impact of the nation’s medical debt crisis. They found that 41% of adults have some form of healthcare debt. In the patient financing industry, profit margins are over 29%, which is nearly 7x higher than what is considered to be a solid hospital profit margin. A UNC Health public records analysis found that after AccessOne began administering payment plans for the system’s patients, the percentage of people paying interest on their bills increased from 9% to 46%.

According to the CFPB, “Patients appear not to fully understand the terms of the products and sometimes end up with credit they’re unable to afford.” Federal regulators warned that patient financing products pose another risk to low-income patients. They should be offered financial assistance with large medical bills, but instead, they are being routed into credit cards or loans that pile interest on top of medical bills they cannot afford.

Medical credit cards and other loans for medical bills can deepen patients’ debts and threaten their financial security. The number of people with healthcare debts is increasing, and many patients remain confused about the terms of the loans. Profit margins in the patient financing industry are high, and patients are often funnelled into credit cards rather than offered financial assistance with large medical bills. This can lead to confusion and financial ruin for those who get sick. The report concluded that “many people would be better off without these products.”

Is Recession Imminent?

As fears of a looming recession rise, David Rosenberg, president of Rosenberg Research and former chief North American economist at Merrill Lynch, suggests that a recession might be imminent. Despite recent GDP figures showing growth, Rosenberg forewarns that the leading indicators hint that a recession could start as early as this quarter.

With inflation on the rise, Americans are struggling with wages that cannot keep up with the increasing cost of living. Should a recession occur, it could cause worse financial difficulties for many. Rosenberg explains a recession as a “haircut to national income” that is comparable to “the whole country taking a pay cut.” The effects of a recession will not only impact individuals but could also spell trouble for the stock market.

The outbreak of the pandemic, coupled with variations, broke the world’s economy, and a recession was just one of many repercussions. Even as the world struggled to recover from the pandemic’s impact, the United States Federal Reserve began hiking interest rates in early 2022. This move caused fears among investors as rates influence the economy and the stock market. Although the GDP figures indicate an expanding economy, Rosenberg warns that a recession might be closer than anticipated.

An economic recession could lead to increased unemployment, lower wages, and volatile stock markets, further exacerbating the gap between the rich and the poor. Therefore, policymakers must put measures to prevent such economic shockwaves, as a recession has far-reaching impacts on the nation’s livelihood and global economies.

Bear Market

According to David Rosenberg, he believes that he is bearish on equities as he’s not confident that all recessions are fully priced in, given the current valuations. He asserts that investing in investment-grade corporate bonds could be a plausible route to take due to the attractive yields on offer with debt offering priority over equity in a company’s capital structure. Among other opportunities, private credit investments have also emerged which offer a higher yield for investors who are looking to diversify their portfolios, but aren’t satisfied with most conventional savings accounts or certificates of deposit (CDs).

The S&P 500 took a bad hit in 2022, plunging 19.4%, and although it has experienced some revival in 2023 with a 9% uptick year-to-date, Rosenberg doesn’t believe this will be long-lived. On account of valuation, he highlights that there is a pressing concern regarding the 19 forward multiple. In his view, this will only result in a 5.3% earnings yield, whereas, he could “pick up 5.4% in single-A triple-B corporate credit” to “wind up in a better part of the capital structure”.

While bondholders will be given the first bite of the cherry, David Reilly, Chief Investment Officer at Nuveen’s Global Private Markets Group, highlights that these investors will often come with other expenses. The cost of investing in corporate credit to access these desirable yields could potentially see investors being forced to invest in leveraged loans or more higher-risk credit. Regardless of the obstacles, it is evident that there is a lot of funds in this space, given the record low-interest rates and a thirst for yield.

Furthermore, while commercial real estate has been enjoying high rewards too, there is significant debate concerning its future given flexible working now being the norm over an office-based environment. Consequently, alternative forms of profitable investments continue to shine and could serve as an alternative means for investors to access the exposures they desire.

From Weak Hands To Strong Hands

David Rosenberg has predicted that the S&P 500 will see a drop of around 23% due to a forthcoming recession in the US economy. His prediction, which is based on an assumption of a “classic 20% hit to earnings” and multiples falling to 15 or 16, puts the target price at 3,200. While the prospect of a significant downturn is not generally good news for investors, Rosenberg believes that those who have “dry powder and liquidity” will have an opportunity to purchase assets at better prices. This is because during a recession, assets tend to fall from weaker hands to stronger ones. The cleansing effect of the recession on the market means that it could be a good time to invest, providing the investor has the necessary liquidity. Rosenberg’s portfolio is currently underweight in equities, with the lowest weighting since 2007. Instead of stock investments, he has turned to bonds, gold, and alternative investments as uncorrelated supports to GDP.

Individuals looking to prepare for an economic downturn can invest in alternative assets, such as real estate. With as little as $100, those without extensive investment portfolios can diversify their holdings and potentially gain consistent income. Several assets offered today are well suited to taking advantage of trends in real estate, including real estate investment trusts, which provide periodic income and portfolio diversification. Investors can also turn to private real estate funds that invest in various types of property, such as commercial or residential, to further diversify their portfolio. Those with an entrepreneurial spirit can even take part in crowdfunding campaigns, which give access to small, high-yielding, long-term projects.

Despite the fears of market downturns, many investors are still seeing opportunities for growth and expansion. The current market conditions do not predict immediate economic disaster, and the ability to protect wealth and diversify through alternative assets offers investors a resilient portfolio. As we continue further into the 21st century, alternative asset classes will become an increasingly important component of investment portfolios.

Warnings Of Potential Cash Shortage By June 1st, If Debt Ceiling Not Raised

US Treasury Secretary Janet Yellen has issued a warning that the United States could run out of cash by 1 June if Congress fails to raise or suspend the debt ceiling. The country reaching the debt ceiling means the government would be unable to borrow any further money. On Monday, Yellen urged Congress to act quickly to address the $31.4 trillion debt ceiling. In response, President Joe Biden has called a meeting of congressional leaders to discuss the issue on May 9th.

The debt ceiling has been raised, extended, or revised 78 times since 1960. However, in this instance, House Republicans are demanding drastic spending cuts and a reversal of some aspects of President Biden’s agenda, including his student loan forgiveness program and green energy tax credits, in exchange for votes to raise the debt ceiling. This has resulted in objections from Democrats in the Senate and from President Biden himself, who stated last week that the issue is “not negotiable.”

The president is coming under increasing pressure from business groups, including the US Chamber of Congress, to discuss Republican proposals. A default, which would be the first in US history, could disrupt global financial markets and damage trust in the US as a global business partner. Experts have warned that it could also lead to a recession and rising unemployment. It would also mean that the US would be unable to borrow money to pay the salaries of government employees and military personnel, social security checks, or other obligations such as defense contractor payments.

In addition, even weather forecasts could be impacted, as many rely on data from the federally-funded National Weather Service. In a letter to members of Congress, Yellen stated that “We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.”

Yellen added that it is impossible to know for sure when exactly the US will run out of cash. Her announcement came on the same day as the Congressional Budget Office (CBO) reported that there is a “significantly greater risk that the Treasury will run out of funds in early June.” The CBO report said that “The projected exhaustion date remains uncertain, however, because the timing and amount of revenue collections and outlays over the coming weeks are difficult to predict.”

The Treasury plans to increase borrowing through the end of the quarter ending in June, totalling about $726 billion – about $449 billion more than projected earlier this year. Officials have said that this is partly due to lower-than-expected income tax receipts, higher government spending, and a beginning-of-quarter cash balance that was lower than anticipated.

In a joint statement, Democratic Senate Majority Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries said that the US “does not have the luxury of waiting until June 1 to come together, pass a clean bill to avoid a default and prevent catastrophic consequences for our economy and millions of American families.” The statement also accused Republicans of attempting to impose their “radical agenda” on America.

On the Republican side, House Speaker Kevin McCarthy accused President Biden of “refusing to do his job” and “threatening to bumble our nation into its first-ever default.” He further stated that “The clock is ticking… The Senate and the President need to get to work — and soon.”

In another letter sent to members of Congress in January, Yellen stated that the Treasury Department had begun “extraordinary measures” to avoid a government default. It is important to resolve this issue as soon as possible to avoid negative consequences for the US economy and its citizens.

Ajay Banga Confirmed as New World Bank President: An In-Depth Look into the Future of the Global Development Lender

Ajay Banga has been appointed as the next president of The World Bank, as the development lender faces increasing pressure to reshape its role in order to better address climate change. Mr. Banga is due to take over from David Malpass on June 2, for a five-year term, and has been tasked with leading the bank through a difficult period for the world economy, characterized by slowing global growth and high interest rates in many major economies. Mr. Banga will also be required to play a leading role in driving forward the lender’s evolution plans, which aim to allow it a $50bn lending boost over the next decade, helping it to address global challenges like climate change.

The appointment of Mr. Banga is significant not only because he will be leading The World Bank through a challenging period, but also because the appointment comes at a time when there have been growing calls from emerging and developing economies for the US to relinquish its grip on the presidency of the lender. As a US citizen himself, Mr. Banga’s appointment has been met with a mixture of anticipation and skepticism, with many voices in the developing world demanding that the appointment does not dilute the bank’s focus on the pressing economic development needs of developing economies.

One of Mr. Banga’s key priorities, according to a statement from the bank, will be to work with the private sector to help tackle financing for global problems. “There is not enough money without the private sector,” he said, adding that the World Bank should set up a system that could share risk or mobilize private funds to achieve its goals.

In recent years, there has been growing concern about the ability of low-income countries to cope with the double shock of higher borrowing costs and a decline in demand for their exports due to the tough economic conditions prevailing in many developed economies. The IMF’s chief Kristalina Georgieva warned last month that this situation could fuel poverty and hunger, and called for urgent action to address it. It is hoped that Mr. Banga’s experience in bringing together governments, the private sector and non-profits to deliver on ambitious goals will help The World Bank to meet this challenge.

Mr. Banga himself has acknowledged the difficult conditions facing the global economy, but has expressed his confidence that The World Bank will be able to rise to the challenge. “These are all tools in the toolkit and I’m going to try and figure it out,” he said.

One of the most pressing challenges facing The World Bank is the need to address climate change, conflict and the pandemic, which the bank estimates will require developing countries to find $2.4tn every year for the next seven years. Plans to reform the bank have been broadly welcomed, but there is concern that new objectives could relegate the pressing economic development needs of member countries. “We want to make sure that the development agenda is not diluted in the climate agenda,” said Abdoul Salam Bello, a member of The World Bank’s executive board representing 23 African countries.

Despite these concerns, many experts believe that Mr. Banga’s appointment marks a turning point for The World Bank, and that his leadership will be instrumental in helping the lender to take a more decisive approach to the global challenges facing it. The appointment of Mr. Banga is just one step along the way for The World Bank, but it is an important one, and if he can navigate the many challenges facing the lender, he could leave behind a lasting legacy.

GOP-Led Congress Passes “Limit, Save, Grow Act of 2023”

The U.S. House of Representatives on Wednesday, April 26, 2023 passed the Limit, Save, Grow Act of 2023 as the debt ceiling debate continues in the nation’s capital. House speaker Kevin McCarthy introduced the legislation on April 19, which would “limit federal spending, save taxpayer dollars,” and “grow the economy.”

The legislation passed 217-215. Four Republicans voted against the bill, which did not get a single vote from a Democrat.

The vote allows the US to raise the nation’s debt limit for one year and limit federal spending growth to 1% annually. The plan, titled the “Limit, Save, Grow Act of 2023,” would increase the debt limit by $1.5 trillion, or until March 31, 2024, whichever comes first.

McCarthy also plans to repeal key parts of Democrats’ signature legislative package and President Biden’s college student debt cancellation program. The GOP bill would also remove $80 billion that Democrats approved last year to improve the Internal Revenue Service (IRS). However, the Congressional Budget Office estimated that repealing the measure would increase the deficit.

McCarthy said on the House floor that limiting government spending would reduce inflation and restore fiscal discipline in Washington. He added that if Washington wants to spend more, it will have to find savings elsewhere, as every household in America does. McCarthy noted that Medicare and Social Security would not be impacted by the cuts. The framework also includes work requirements for adults without dependents enrolled in federal assistance programs.

According to a press release, the legislation would specifically:

  • “End the Era of Reckless Washington Spending
  • “Reclaim Unspent COVID Funds
  • “Defund Biden’s IRS Army
  • “Repeal ‘Green New Deal’ Tax Credits
  • “Prohibit [President Joe] Biden’s Student Loan Giveaway to the Wealthy
  • “Strengthen the Workforce and Reduce Childhood Poverty
  • “Prevent Executive Overreach and Restore Article I
  • “Lower Energy Costs and Utilities”

The plan also includes “a responsible debt limit increase.”

However, Democrats remain critical of any efforts to link debt ceiling negotiations to legislation that would require work requirements for those on assistance programs. David Scott, the House Agriculture Committee ranking member, said that holding food assistance hostage for those who depend on it in exchange for increasing the debt limit is a nonstarter.

The US hit its current debt limit of $31 trillion in January. The Treasury Department is employing what it refers to as extraordinary measures to essentially act as a band-aid for several months. Those measures are set to run out in early summer. Should Congress fail to raise the debt limit by then, there would be an unprecedented debt default, something that would throw worldwide financial markets into dire straits and likely lead to a recession.

In a speech, McCarthy blasted the president for not meeting with him to negotiate. The pair last met in February and remain at odds over how to address the debt limit. Biden has repeatedly said he wants to sign a clean debt limit bill. Senate Majority Leader Chuck Schumer has also said that efforts to address spending cuts “belong in the discussion about budget, not as a precondition for avoiding default.”

The proposal is likely to face opposition in the Democratic-controlled Senate. Passing the bill would require bipartisan support, which may be difficult given the current political climate. Nonetheless, McCarthy remains optimistic that the proposal will succeed.

“Limited government spending will reduce inflation and restore fiscal discipline in Washington,” McCarthy said. “If Washington wants to spend more, it will have to come together and find savings elsewhere — just like every single household in America.”

“Our plan ensures adults without dependents earn a paycheck and learn new skills,” he said. “By restoring these commonsense measures, we can help more Americans earn a paycheck, learn new skills, reduce childhood poverty and rebuild the workforce.”

“By including these radical proposals as a lever in debt limit negotiations, Speaker McCarthy and his extreme Republican colleagues are ensuring their failure,” David Scott, D-Ga., House Agriculture Committee ranking member, said of McCarthy’s proposal for work requirements.

“President Biden has a choice: Come to the table and stop playing partisan political games, or cover his ears, refuse to negotiate and risk bumbling his way into the first default in our nation’s history,” McCarthy said.

Warren Buffett Worried About Nuclear Threats And Pandemics

Warren Buffett, the billionaire investor, expressed that he is not worried about the success of his company, Berkshire Hathaway, despite current economic headwinds such as banking failures and rising interest rates. Speaking on CNBC’s “Squawk Box,” the 92-year-old said, “I never go to bed worried about Berkshire and how we’ll handle a thing.” He added that, at his age, he has other things to worry about, such as “the nuclear threat” and “a pandemic in the future.”

Berkshire Hathaway, under Buffett’s leadership since 1965, has become one of the world’s largest companies with a market capitalization above $707 billion. Its portfolio of investments includes Geico, Dairy Queen, Duracell, and Fruit of the Loom. Buffett’s history of optimism is well-documented, with data scientists identifying a surplus of positivity in his annual letters to shareholders.

Buffett’s investment strategy is to choose investments he believes in, regardless of their current price, and take advantage of stock drops to buy more of companies he trusts. During a volatile market period in 2016, he advised investors not to watch the market closely when stocks are down. He is known to be supremely self-confident, with “99 and a fraction percent” of his net worth invested in Berkshire, along with several family members.

When confronted with scary issues that are outside of his control, such as nuclear war or future pandemics, Buffett attempts to reduce his stress by focusing on situations and tasks that he can actually solve himself. “I worry about things nobody else worries about, but I can’t solve them all,” he said. “But anything that can be solved, I should be thinking about that.”

Regarding Berkshire’s future, Buffett has already selected the company’s next CEO, Greg Abel, who has stated that he does not plan to diverge from Buffett’s successful formula. Buffett trusts the leaders of Berkshire’s portfolio companies to make the right business decisions and expects Abel to do the same. “I am not giving [Abel] some envelope that tells him what to do next,” but Berkshire Hathaway is “so damn lucky” to have Abel taking the reins, Buffett said.

In conclusion, Warren Buffett’s optimism and confidence have helped him build and sustain one of the world’s largest companies. Despite economic headwinds, he remains unworried about the future of Berkshire Hathaway and instead focuses on things he can control. With a trusted successor in place, Buffett is confident that the company’s success will continue long after he steps down.

NITI Aayog Vice Chair Suman Bery Leads Discussion On Indian Economy In New York

The Indian Consulate in New York held a Round Table on India’s economy on April 20, 2023, which was led by India’s Vice Chairman of Niti Aayog Suman Bery, who is on a visit to the United States.

The Round Table was entitled, Indian Growth Story: Speed, Scale, and Opportunities, and it was attended by high-profile guests from the business sector such as Deepak Raj, managing director of private investment firm Raj Associates and Padma Shri recipient Dr. Sudhir Parikh, chairman of Parikh Worldwide Media.

Caption: Vice Chairman of India’s NITI Aayog Suman Bery, speaking at the Round Table on India’s economy held April 20, 2022, at the Indian Consulate in New York. PHOTO: Indian Consulate.

“It was a pleasure participating in the roundtable discussion on the Indian Growth Story: Speed, Scale and Opportunities at the Consulate General of India, New York (@IndiainNewYork) last evening,” Bery, an economist who took over at NITI last year in May, tweeted after the meeting.

The event was attended by approximately 50 corporate leaders from various sectors such as IT, technology, finance, healthcare, high-level executives, and policymakers.

Picture : The Hindu

Dr. Sudhir Parikh, chairman of Parikh Worldwide Media, asking a question at the April 20, 2023, Round Table on India’s economy with Vice Chairman of NITI Aayog Suman Bery, held at the Indian Consulate in New York. Also seen are other high profile participants, as well as India’s Deputy Consul General Dr. Varun Jeph, right. PHOTO: Indian Consulate

Among the subjects discussed were the markers of India’s economic growth making it one of the world’s fastest-growing economies; elements of India’s energy transition, New Delhi’s Free Trade Agreements which give a strong push to Indian trade, India’s G20 leadership, women’s empowerment, etc.

Businessman from New Jersey Deepak Raj, addressing India’s NITI Aayog Vice Chairman Suman Bery (not in picture) at the April 20, 2023, Round Table on India’s economy, held at the Indian Consulate in New York. PHOTO: Indian Consulat

The International Monetary Fund estimates India’s growth projections at 5.9 percent in 2023, and 6.3 percent in 2024, compared to the much lower World Output at 2.8 percent in and 3.0 percent, Bery noted accompanied by a visual table.

India has signed 13 Free Trade Agreements and 6 preferential pants so far with its trading partners for ensuring greater market access for domestic goods and promoting exports, Bery pointed out, with appropriated visual representations. The most recent FTAs signed are with Mauritius, UAE, and Australia.

More than 50 high- profile attendees were present at the April 20, 2023, Round Table on the Indian economy, held at the Indian Consulate in New York, with Vice Chair of India’s NITI Aayog Suman Bery. PHOTO: Indian Consulate

India is also actively engaged in FTA negotiations with countries like United Kingdom, European Union, and Canada.

India’s energy transition includes elements of – increasing electrification; higher penetration of cleaner fuels in energy mix; accelerated adoption of energy-efficient technologies; rising digitalization, among other efficiencies, Bery noted.

On the same day, April 20, Bery was the chief guest at a Student Roundtable and Lunch in Columbia University’s Center on Global Energy Policy at the School of International and Public Affairs.

Before being appointed Vice Chair at NITI Aayog, Bery served in various capacities – Senior Visiting Fellow at the Centre for Policy Research, New Delhi; a Global Fellow in the Asia Program of the Woodrow Wilson International Centre for Scholars in Washington D.C.; and a non-resident fellow at Bruegel, an economic policy research institution in Brussels.

In 2012 until mid-2016, Bery was Shell’s Global Chief Economist, where he advised the board and management on global economic and political developments. He was also part of the senior leadership of Shell’s global scenarios group.

Prior to that, Bery served as Director-General of the National Council of Applied Economic Research, one of India’s leading socioeconomic research institutions.

Bery also served at various times as a member of the Prime Minister’s Economic Advisory Council, of India’s Statistical Commission, and of the Reserve Bank of India’s Technical Advisory Committee on Monetary Policy.

He also worked at the World Bank, engaged in research on financial sector development and country policy and strategy, focusing on Latin America and the Caribbean.

Do The Rich Pay Their ‘Fair Share’?

Tax Day has recently passed and according to a recent Pew Research poll, Americans’ frustration with the tax code has reached its highest point in recent years. The majority of Americans, 56%, say they pay “more than their fair share” of taxes, with the number having increased from 51% from 2019.

It is also no surprise that almost two-thirds of Americans believe that the wealthy do not pay enough taxes, with 61% supporting the idea of raising taxes on households earning over $400,000. However, the definition of what constitutes a “fair share” of taxes is subjective and many Americans may not understand how much of the tax burden the rich bear.

In 2020, the top 1% of taxpayers paid $722 billion in income taxes, which accounted for 42.3% of all income taxes paid – the highest percentage in modern history. In contrast, the bottom 90% of taxpayers paid $450 billion in income taxes, or just 26.3% of the total, representing their lowest percentage of the tax burden in decades. This means that the top 1% of taxpayers pay a far greater share of the nation’s tax burden than 142 million of their neighbors combined.

Picture : Federal Budget

The wealthy do not pay a larger amount solely because they earn the most money. In 2020, the top 1% of taxpayers earned 22% of all adjusted gross income, while their 42.3% share of income taxes is nearly twice their income share. The opposite is true for the bottom 90%, who earned more than half of the nation’s income but paid only 26.3% of the taxes, representing roughly half of their share of the nation’s income. This was not the case in 1980, where the tax burden was more evenly shared. The bottom 90% earned 68% of the nation’s income and paid 52% of the income taxes, while the top 1% earned 9.6% of the nation’s income and paid 17% of the income taxes.

One of the reasons for the progressive tax system in the United States is the massive expansion of social programs delivered through the tax code over the past three decades. Many of the most significant programs aimed at lower-income families and those with children, such as the Child Tax Credit and the Earned Income Tax Credit, are run through the IRS, which deliver roughly $180 billion in benefits each year, much of which is refundable. Since the mid-1990s, tax credits have multiplied, with credits for adoption, child care, senior care, college tuition, buying electric cars or solar panels, and buying health insurance, among other things. However, these responsibilities are beyond the capacity of a tax collection agency, making it difficult for the IRS to function.

Record numbers of taxpayers now pay no income taxes after claiming their credits and deductions, with 34% of tax filers paying no income taxes due to generous credits and deductions in the tax code. In 2019, 54 million tax filers, equal to 34%, paid no income taxes because of the tax code’s generous credits and deductions. In 1980, only 21% of tax filers paid no income taxes due to credits and deductions.

Despite politicians’ rhetoric about ensuring the fair share of taxes, the burden on top earners continues to climb. If the wealthy were indeed able to use loopholes to avoid paying taxes, many of them would need better accountants.

How Ajay Banga Could Reshape World Bank To Tackle Climate Change

World Bank shareholders are gathered in Washington this week for their annual spring meetings, while the global financial institution is poised for new leadership that could change how it approaches climate and other global crises. Business executive Ajay Banga is expected to be confirmed as the bank’s president in the coming weeks.

Richard T. Clark is a political scientist who studies policymaking at the World Bank and the International Monetary Fund. Clark says Banga could push the World Bank to tackle climate change more aggressively in three ways, but that each approach carries risk.

Clark says:

“The World Bank is at an inflection point – Ajay Banga is slated to take over for current President David Malpass, who has been labeled a climate-skeptic by some observers. Banga, who was nominated by the United States, faces pressure to reorient the World Bank’s lending portfolio to tackle climate change more aggressively. He could do this in several ways, but each has its pitfalls.

“First, he could ask member states, who fund the organization, for additional resources, but Janet Yellen – the U.S. Treasury Secretary – said the U.S. would not back such a move. Given that the U.S. is the Bank’s largest shareholder, this makes a capital increase unlikely.

“A second option is for Banga to ease capital requirements by expanding the Bank’s lending portfolio without additional funds from member states, but this could put the Bank’s AAA credit rating at risk, especially given that many of the Bank’s debtors are experiencing debt crises of their own, limiting their ability to repay future debt.

“Third, Banga could reallocate funds traditionally offered to developing countries for poverty reduction and physical infrastructure towards climate and clean energy initiatives – for instance, lending to middle-income countries to help them transition away from coal. Unsurprisingly, the world’s poorest nations oppose such a move since it limits their ability to draw on the Fund’s resources to promote growth. More generally, developing nations have long been frustrated with the fact that the World Bank is governed primarily by rich Western countries who may put their own needs ahead of those of the developing world.”

The Rising Cyber Weapons Market Forecast, 2021-2031

Allied Market Research published a report, titled, “Cyber Weapons Market by Type (Defensive, Offensive), by Application (National Defense System, Public Utility, Automated Transportation system, Smart Power Grid, Industrial Control System, Financial System, Communication Network, Others), by End User (Government, BFSI, Corporate, Other): Global Opportunity Analysis and Industry Forecast, 2021-2031.” According to the report, the global cyber weapons market was valued at $9.2 billion in 2021 and is estimated to generate $23.7 billion by 2031, witnessing a CAGR of 10.1% from 2022 to 2031.

The use of cyber weapons has grown significantly as the U.S. attempts to develop new tools and capacities for national security and defence. The National Security Agency (NSA) and Cyber Command are at the center of the American government’s significant investments in the creation of cyberweapons. The development of cyber weapons has been fueled by both the rise in reliance on digital infrastructure and the threat of cyberattacks from other countries, criminal groups, and other entities. The U.S. government accessed crucial data from other countries using cyber weapons.

According to Interesting Engineering, in September 2022, the U.S. National Security Agency’s (NSA) cyber-warfare unit used 41 different types of weapons to steal critical technology data from a Chinese space and aviation university. This data included the configuration of critical network equipment, network management information, and critical operational information. Specific information regarding their creation and use is not made available to the general public because the use of cyber weapons by the U.S. is highly classified. Also, it is evident that cyber weapons have grown in importance as a tool in the U.S. national security strategy, which has fueled the growth of the cyber weapons business in the country.

On the basis of application the global cyber weapons market, is segmented into national defense systems, public utility, automated transportation systems, smart power grid, industrial control systems, financial systems, communication networks, and others. The development of international trade and the improvement of living standards have been facilitated by transportation infrastructure. Communities all over the world are connecting more than ever because of huge advancements in the flow of people and things. Yet, the presence of various control systems and auxiliary systems is increasing the interconnection and complexity of transportation networks.

The use of communications and IT has increased the effectiveness and functionality of transportation networks, but it has also raised the possibility of vulnerabilities. Attacks using cyber weapons on transportation networks can take a variety of shapes and have a range of possibilities and outcomes. A popular attack method that overburdens the system and causes a denial-of-service (DoS) for the entire system is traffic redirection to the server. A different type of cyber weapon effect is the theft of personal information, which can result in the displacement of expensive and/or dangerous commodities like explosives, radioactive agents, chemical, and biological chemicals, which is problematic for the transportation industry. Terrorists might utilise these materials, if they were stolen, to make bombs and other deadly weapons. Automated transportation systems that integrate cyber weapons are used to prevent or respond to such incidents, which supports the market’s growth.

Luxury Jewelry Market Size Is Projected To Reach USD 95.8 Billion By 2030

The Global Luxury Jewelry Market is anticipated to grow at a 7.85% CAGR and is estimated to be worth USD 95.78 Billion by the end of 2030.

Luxury Jewelry is well-known for its sophisticated designs and utilization of the most precious and uncommon unrefined substances. The Luxury Jewelry Market is vigorous and quickly developing. It’s also exceptionally divided and determined by buyer conduct and style. In the nearing years, huge market development is normal, from increasing extra cash and amplifying buyer consumption of extravagant merchandise. Assimilating the luxury gems industry with diversion and allure businesses has set new open doors for the market.

One of the main points herding the Luxury Jewelry Market is boosting discretionary cash flow. When the population’s discretionary cash flow develops, so does their purchasing power, bringing about amplified interest and utilization of luxury gems. Also, the traditions embracing extravagant metals are necessary components driving the interest in extravagant adornment pieces.

Amplifying interest in men’s adornments addresses viable freedom for the development of the market over the figure time frame. Generally, ladies are more minded than men toward buying luxury gems. Be that as it may, this pattern is remodelling, inferable from expanding the focal point of men on self-grooming and graceful allure.

The Global Luxury Jewelry Market is segmented into five regions; North America, Asia Pacific, Europe, Latin America, and the Middle East & Africa.

Europe represented the biggest portion of the global industry on the lookout, followed by North America. These areas comprise created nations with high per capita pay, just as significant luxury brands, filling the market development. Also, the high female workforce interest rate in these countries is a significant factor that adds to the development of the market. Besides, the Asia- Pacific area is expected to have a high CAGR during the estimated time frame.

Asia Pacific dominated the market for luxury jewelry and was considered for the largest revenue share of 65.4% in 2021. China and India are the two largest markets for luxury jewelry in the region. The latest styles and the requirement for high-quality jewelry among top customers are two eloquent drivers driving the market for luxury jewelry in this region.

The region is anticipated to see an increase in the popularity of online distribution. The majority of luxury jewelry is bought for special occasions or events like marriages and engagements. Further, due to continuous restrictions on international travel and the augmentation of domestic duty-free zones in China, demand from younger customers as well as those who shop domestically is anticipated to climb.

The global Luxury Jewelry Market’s prominent key players are Buccellati Holding, Italia SPA, Chopard International SA, Mikimoto & Co. Ltd., Bulgari S.P.A., Graff Diamond Corporation, Companies Financiere Richmond S.A., Tiffany & Co., Societe Cartier, Harry Winston Inc., Guccio Gucci S.P.A., Chanel, LVMH Moet Hennessy, Signet Jewellers, Cartier International SNC, Rajesh Exports Ltd.

Global Economy Heading For Weakest Period Of Growth Since 1990

The global economy is heading for the weakest period of growth since 1990 as higher interest rates set by the world’s top central banks drive up borrowing costs for households and businesses, the head of the International Monetary Fund has warned, a media outlet reported.

Kristalina Georgieva, the IMF’s managing director, said that a sharp slowdown in the world economy last year after the aftershocks of the Covid pandemic and the Russian invasion of Ukraine would continue in 2023, and risked persisting for the next five years, The Guardian reported.

In a curtain raiser speech before the fund’s spring meetings in Washington DC next week, she said that the global growth would remain about 3 per cent over the next five years – its lowest medium-term growth forecast since 1990.

“This makes it even harder to reduce poverty, heal the economic scars of the Covid crisis and provide new and better opportunities for all,” Georgieva said.

In a downbeat assessment as the world grapples with the worst inflation shock in decades, she said economic activity was slowing across advanced economies in particular. While there was some momentum from developing nations – including China and India – low-income countries were also suffering from higher borrowing costs and falling demand for their exports, the media outlet reported.

Ahead of the IMF publishing revised economic forecasts next week, Georgieva said global growth in 2022 had collapsed by almost half since the initial rebound from the Covid pandemic in 2021, sliding from 6.1 per cent to 3.4 per cent. With high inflation, rising borrowing costs and mounting geopolitical tensions, she said global growth was on track to drop below 3 per cent in 2023 and remain weak for years to come.

As many as 90 per cent of advanced economies would experience a decline in their growth rate this year, she warned, with activity in the US and the eurozone hit by higher interest rates, it added.

Comparing the challenge to “climbing one ‘great hill’ after another”, Georgieva said there were still more problems to overcome: “First was Covid, then Russia’s invasion of Ukraine, inflation and a cost of living crisis that hit everyone.”

“So far, we have proven to be resilient climbers. But the path ahead – and especially the path back to robust growth – is rough and foggy, and the ropes that hold us together may be weaker now than they were just a few years ago,” she was quoted as saying by the media outlet. (IANS)

India, China To Account For Half Of Global Economic Growth In 2023

The period of slower economic activity will be prolonged, with the next five years witnessing less than 3 per cent growth.

The IMF chief on Thursday said that the world economy is expected to grow at less than 3 per cent this year, with India and China expected to account for half of global growth in 2023.

International Monetary Fund (IMF) managing director Kristalina Georgieva warned that a sharp slowdown in the world economy last year following the raging pandemic and Russia’s military invasion of Ukraine would continue this year.

The period of slower economic activity will be prolonged, with the next five years witnessing less than 3 per cent growth, “our lowest medium-term growth forecast since 1990, and well below the average of 3.8 per cent from the past two decades,” she said.

“Some momentum comes from emerging economies — Asia especially is a bright spot. India and China are expected to account for half of global growth in 2023. But others face a steeper climb,” she explained.

“After a strong recovery in 2021 came the severe shock of Russia’s war in Ukraine and its wide-ranging consequences — global growth in 2022 dropped by almost half, from 6.1 to 3.4 per cent,” Georgieva said.

Georgieva said slower growth would be a “severe blow,” making it even harder for low-income nations to catch up.

“Poverty and hunger could further increase, a dangerous trend that was started by the COVID crisis,” she explained.

Her comments come ahead of next week’s spring meetings of the IMF and the World Bank, where policy-makers will convene to discuss the global economy’s most pressing issues.

The annual gathering will take place as central banks around the world continue to raise interest rates to tame galloping inflation rates.

About 90 per cent of advanced economies are projected to see a decline in their growth rates this year, she said.

For low-income countries, higher borrowing costs come at a time of weakening demand for their exports, she said.

Georgieva added that while the global banking system had “come a long way” since the 2008 financial crisis, “concerns remain about vulnerabilities that may be hidden, not just at banks but also non-banks. “Now is not the time for complacency.”

New Leaders At World Bank And BRICS Bank Have Different Outlooks

US President Joe Biden announced that the United States had placed the nomination of Ajay Banga to be the next head of the World Bank, established in 1944. There will be no other official candidates for this job since—by convention—the US nominee is automatically selected for the post. This has been the case for the 13 previous presidents of the World Bank—the one exception was the acting president Kristalina Georgieva of Bulgaria, who held the post for two months in 2019. Georgieva is currently the managing director of the IMF.

In the official history of the International Monetary Fund (IMF), J. Keith Horsefield wrote that US authorities “considered that the Bank would have to be headed by a US citizen in order to win the confidence of the banking community, and that it would be impracticable to appoint US citizens to head both the Bank and the Fund.” By an undemocratic convention, therefore, the World Bank head was to be a US citizen and the head of the IMF was to be a European national . Therefore, Biden’s nomination of Banga guarantees his ascension to the post.

A month later, the New Development Bank’s Board of Governors—which includes representatives from Brazil, China, India, Russia, and South Africa (the BRICS countries) as well as one person to represent Bangladesh, Egypt, and the United Arab Emirates—elected Brazil’s former president Dilma Rousseff to head the NDB, popularly known as the BRICS Bank.

The BRICS Bank, which was first discussed in 2012, began to operate in 2016 when it issued its first green financial bonds. There have only been three managing directors of the BRICS Bank—the first from India (K.V. Kamath) and then the next two from Brazil (Marcos Prado Troyjo and now Rousseff to finish Troyjo’s term). The president of the BRICS Bank will be elected from its members, not from just one country.

Banga comes to the World Bank, whose office is in Washington, D.C., from the world of international corporations. He spent his entire career in these multinational corporations, from his early days in India at Nestlé to his later international career at Citigroup and Mastercard. Most recently, Banga was the head of the International Chamber of Commerce, an “executive” of multinational corporations that was founded in 1919 and is based in Paris, France.

As Banga says, during his time at Citigroup, he ran its microfinance division, and, during his time at Mastercard, he made various pledges regarding the environment. Nonetheless, he has no experience in the world of development finance and investment. He told the Financial Times that he would turn to the private sector for funds and ideas. His resume is not unlike that of most US appointees to head the World Bank.

The first president of the World Bank was Eugene Meyer, who built the chemical multinational Allied Chemical and Dye Corporation (later Honeywell) and who owned the Washington Post. He too had no direct experience working on eradicating poverty or building public infrastructure. It was through the World Bank that the United States pushed an agenda to privatize public institutions. Men such as Banga have been integral to the fulfillment of that agenda.

Dilma Rousseff, meanwhile, comes to the BRICS Bank with a different resume. Her political career began in the democratic fight against the 21-year military dictatorship (1964-1985) that was inflicted on Brazil by the United States and its allies. During Lula da Silva’s two terms as president (2003-2011), Dilma Rousseff was a cabinet minister and his chief of staff.

She took charge of the Programa de Aceleração do Crescimento (Growth Acceleration Program) or PAC, which organized the anti-poverty work of the government. Because of her work in poverty eradication, Dilma became known popularly as the “mãe do PAC” (mother of PAC). A World Bank study from 2015 showed that Brazil had “succeeded in significantly reducing poverty in the last decade”; extreme poverty fell from 10 percent in 2001 to 4 percent in 2013. “[A]pproximately 25 million Brazilians escaped extreme or moderate poverty,” the report said.

This poverty reduction was not a result of privatization, but of two government schemes developed and established by Lula and Dilma: Bolsa Família (the family allowance scheme) and Brasil sem Misería (the Brazil Without Extreme Poverty plan, which helped families with employment and built infrastructure such as schools, running water, and sewer systems in low-income areas). Dilma Rousseff brings her experience in these programs, the benefits of which were reversed under her successors (Michel Temer and Jair Bolsonaro).

Banga, who comes from the international capital markets, will manage the World Bank’s net investment portfolio of $82.1 billion as of June 2022. There will be considerable attention to the work of the World Bank, whose power is leveraged by Washington’s authority and by its work with the International Monetary Fund’s debt-austerity lending practices.

In response to the debt-austerity practices of the IMF and the World Bank, the BRICS Health/Sciencecountries—when Dilma was president of Brazil (2011-2016)—set up institutions such as the Contingent Reserve Arrangement (as an alternative to the IMF with a $100 billion corpus) and the New Development Bank (as an alternative to the World Bank, with another $100 billion as its initial authorized capital).

These new institutions seek to provide development finance through a new development policy that does not enforce austerity on the poorer nations but is driven by the principle of poverty eradication. The BRICS Bank is a young institution compared to the World Bank, but it has considerable financial resources and will need to be innovative in providing assistance that does not lead to endemic debt. Whether the new BRICS Think Tank Network for Finance will be able to break with the IMF’s orthodoxy is yet to be seen.

De-Dollarization Gaining Momentum As Countries Seek Alternatives To Dollar

The U.S. dollar has dominated global trade and capital flows over many decades. However, many nations are looking for alternatives to the greenback to reduce their dependence on the United States.

This graphic catalogs the rise of the U.S. dollar as the dominant international reserve currency, and the recent efforts by various nations to de-dollarize and reduce their dependence on the U.S. financial system.

The global de-dollarization campaign is gaining momentum, as countries around the world seek alternatives to the hegemony of the US dollar.

The global de-dollarization campaign is gaining momentum, as countries around the world seek alternatives to the hegemony of the US dollar. China, Russia, Brazil, India, ASEAN nations, Kenya, Saudi Arabia, and the UAE are now using local currencies in trade.

The Dollar Dominance

The United States became, almost overnight, the leading financial power after World War I. The country entered the war only in 1917 and emerged far stronger than its European counterparts.

As a result, the dollar began to displace the pound sterling as the international reserve currency and the U.S. also became a significant recipient of wartime gold inflows.

The dollar then gained a greater role in 1944, when 44 countries signed the Bretton Woods Agreement, creating a collective international currency exchange regime pegged to the U.S. dollar which was, in turn, pegged to the price of gold.

Picture : Elements of visual capitalist

By the late 1960s, European and Japanese exports became more competitive with U.S. exports. There was a large supply of dollars around the world, making it difficult to back dollars with gold. President Nixon ceased the direct convertibility of U.S. dollars to gold in 1971. This ended both the gold standard and the limit on the amount of currency that could be printed.

Although it has remained the international reserve currency, the U.S. dollar has increasingly lost its purchasing power since then.

Russia and China’s Steps Towards De-Dollarization

Concerned about America’s dominance over the global financial system and the country’s ability to ‘weaponize’ it, other nations have been testing alternatives to reduce the dollar’s hegemony.

As the United States and other Western nations imposed economic sanctions against Russia in response to its invasion of Ukraine, Moscow and the Chinese government have been teaming up to reduce reliance on the dollar and to establish cooperation between their financial systems.

Since the invasion in 2022, the ruble-yuan trade has increased eighty-fold. Russia and Iran are also working together to launch a cryptocurrency backed by gold, according to Russian news agency Vedmosti. In addition, central banks (especially Russia’s and China’s) have bought gold at the fastest pace since 1967 as countries move to diversify their reserves away from the dollar.

How Other Countries are Reducing Dollar Dependence

De-dollarization it’s a theme in other parts of the world as well. In recent months, Brazil and Argentina have discussed the creation of a common currency for the two largest economies in South America.

In a conference in Singapore in January, multiple former Southeast Asian officials spoke about de-dollarization efforts underway. The UAE and India are in talks to use Rupees to trade non-oil commodities in a shift away from the dollar, according to Reuters.

For the first time in 48 years, Saudi Arabia said that the oil-rich nation is open to trading in currencies besides the U.S. dollar. Despite these movements, few expect to see the end of the dollar’s global sovereign status anytime soon. Currently, central banks still hold about 60% of their foreign exchange reserves in dollars.

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