A good news packed within a bad one

The US economy is set to emerge from recession in the second half of this year as consumer spending and the housing sector recover, but 2008 turned financial heroes to zeroes unemployment will rise well into 2010, according to a survey.

The Blue Chip Economic Indicators survey of private economists released showed that 86 percent of respondents believed that the economic downturn would be declared to have ended in the second half.

"Real GDP contracted very sharply during the first quarter of this year and will continue to shrink, albeit more slowly in the second quarter before turning very modestly higher in the third and fourth quarters," the survey said.

Much of the anticipated turnaround in the economy, now in its 16th month of recession, would be driven by some improvement in consumer spending, housing, business inventories and exports. Yet, above-trend growth was not expected until the second half of 2010.

Gross domestic product plunged at a 6.3 percent annualized rate in the fourth quarter of 2008, the steepest quarterly decline since 1982. The economic downturn will next month become the longest U.S. recession since the Great Depression.

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Consumer Finance in India-Part 1

Consumer finance in the most basic sense of the word refers to any kind of lending to consumers. In United States it refers to the branch that is lending the amount which is actually very low than the perfect credit. It is the part of retail banking. One of the best ways to get the unsecured loans is through the consumer finance. Through consumer financing one can easily get the loans and can meet the demands and the desires. The term includes the following mentioned activities and these are as follows:
• Loans
• Indirect Finance
A RECENT poll by Asia Money has ranked HDFC Bank as the number one bank in India in categories such as customer service, back-office or post trade finance, competitive and prompt spot pricing, forex options provider for non-Asian currencies, currency strategy provider and technical analysis. The latest issue of the Asian Bankers Journal ranks HDFC Bank at No 7 in the list of strongest banks.

Consumer finance opportunity in India is one of the best available anywhere in the world. Sixty-four per cent of our GDP is domestic consumption-based. We have the youngest population in the world, demographics are changing, types of jobs are changing, and reforms are turning up which will lead to further impetus to consumer dynamics.

In addition, our loan to GDP for consumer loan is 6 per cent; in most developed countries it is 100 per cent and in marginally developed countries it is 40 per cent. So consumer finance will continue to be a major growth area.

Interesting--Salaried crorepatis double in 2 years !!

When on one hand the world’s hit with the global recession and where every now and then exists a fear of another bank being getting collapsed, on the other hand the number of taxpayers earning more than Rs 1 crore annually has doubled in just two years. And, for this increment the credit truly goes to the buoyant economic growth. Corporate sales and profits have risen by more than 30% in the last few years. That has encouraged companies to pay record salaries to their top managers, say tax experts.

According to data compiled by income-tax department, the number of salaried taxpayers earning more than Rs 1 crore (Rs 10 million) crossed 5,000 in fiscal 2008 from 2,200 in fiscal 2006. The total number of millionaires is much higher as it includes non-salaried taxpayers. The data on millionaires, gathered from employee tax deducted at source (TDS), shows the number of people earning between Rs 50 lakh and Rs 1 crore per annum has also more than doubled. It has increased from 4,400 persons in fiscal 2006 to 10,500 in fiscal 2008. The number of those earning more than Rs 10 lakh also increased to 2.24 lakh in FY08 from 87,000 in FY06.

Talking about the millionaires in India, the majority earns between Rs 10 lakh and Rs 20 lakh. In 2007-08, more than 1.5 lakh employees were earning in this income bracket. That is a 250% jump over 2005-06 .While TDS from those earning more than Rs 1 crore was Rs 4,415 crore, and those between Rs 10 lakh and Rs 20 lakh was Rs 5,770 crore. The number of taxpayers earning between Rs 5 lakh and Rs 10 lakh has also doubled in the last two years.(Source:ET)

But this pace may slow down in 2009-10. India’s GDP grew by 7.8% in the first six months of fiscal 2008 from over 9% in the previous year, and corporate bottom lines have also seen a similar dip.So,that will put pressure on salaries.

Denmark to enter recession in 2009

The Danish government slashed its growth forecasts for 2008 and 2009, predicting that the economy would contract by 0.2 per cent in 2009 after growing 0.2 per cent this year. 

"Financial turbulence and the weak international growth outlook will along with the wavering housing market and weakening competitiveness lead to weak GDP (gross domestic product) growth in coming years," the Finance Ministry said in a statement. 

Denmark's economy is not expected to grow before 2010, when its GDP should rise by 0.7 per cent.The government also said it now expected Danish unemployment to double from this year's 1.7 per cent to 3.5 per cent in 2010. The Danish economy can not avoid being affected by the global financial crisis and the poor outlook abroad.

 

 

GDP growth rate--- 7 to 7.5%

The global financial crisis is expected to hurt the Indian economy more than previously anticipated, with Prime Minister Manmohan Singh on Sunday projecting GDP growth to slow down to 7-7.5% next fiscal. 

Although the government and the Reserve Bank battle contraction in credit growth, he underlined the facts that fundamentals of the economy were strong and banks were safe, and promised accelerated efforts to prop up growth. 

"Due to the current international economic and financial situation, our growth rate may come down somewhat next year. However, we still hope to achieve a growth rate of 7 to 7.5% next year," he said.

Reserve Bank of India last month said the $1.2 trillion economy may grow at 7.5% this fiscal as opposed to 9% in 2007-08. The rate in 2008-09 would be the weakest since 2005. 

"The fundamentals of our economy are strong. Our banking system and financial institutions are well capitalized and secure," PM stressed, while pointing to the high-level committee he had constituted to monitor the situation. 

"Our domestic savings rate is 35% of our GDP and our investment rate is 37% of our GDP," he said.