HDFC Bank is  expected  to announce its December quarter  results  on Tuesday, January 16. Analysts and brokerage firms expect the bank to report  good  overall  numbers for the December  quarter  However,  net  profit margin (NIM) may come under  pressure  from  high  capital costs.  

 Earlier this  month,  HDFC Bank  reported  its  total  advances  amounted  to ₹24,69,500 crore as  on  December 31, 2023, registering a growth of  about 62.4% from  ₹15,20,500 crore as  on  December 31, 2022. 

Domestic  personal  loans  increased 111%  year-on-year  and  about 3% quarter-on-quarter (QoQ).

 Commercial and rural banking loans  increased  by  6.5%  and  other  corporate and  wholesale loans (excluding  erstwhile HDFC  Limited non-personal loans) increased  by  2%.  

 The  Bank’s  CASA ratio stood at  approximately 37.7%  as of December 31, 2023,  compared to  44%  as of December 31, 2022 and  37.6%  as of September 30, 2023. 

  Shreyansh Shah,  Research Analyst  at  StoxBox,  expects the bank to  witness  strong  growth in its  business  thanks  to increased  branch count  and  a well-functioning  sales  team , supported  by the  holiday  season. 

  According to  Shah’s estimates,  deposits are  expected  to  grow well  in Q3FY24 due to attractive interest rates and increased  fixed deposit (TD) mobilization.  However,  his  CASA may have a  small  impact due to increased  TD traction.  

  NIM is expected  to  range from 3.4% to 3.6%  due to  high  capital costs.  “We expect  profitability and return  on capital to improve  due to  increased  disbursements, mainly  for  construction  financing.  As HDFC Bank  already manages HDFC’s non-commercial portfolio  Ltd. in the  last quarter,  we do not  expect any  further  deterioration  in asset quality in the current  and  upcoming  quarters,” Shah said.  Going  forward,  Shah expects the bank to have a  strong coverage ratio. Securing  healthy liquidity  thanks  to the merger effect, with  returns supported  by  strong revenue  growth  across  the  various  lending  segments. Additionally, a better mix of  lending sources , especially focusing  on the retail  sector, will  help the bank  perform better than banks  in the  same  industry.  Estimates from  brokerage firm Motilal Oswal Financial Services  suggest that  HDFC Bank  could record  a  32.5% year-on-year increase  in net  profit,  while net interest income  could grow by 26.8% over the same period last year. same period  in  the third quarter of fiscal 2024.  

  HDFC  Bank’s operating profit,  according to Motilal Oswal,  could increase by 26.2% year-on-year.  

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 Amid  growing  tensions in the West  Asian  region,  Foreign  Minister S Jaishankar  began a two-day visit  on  Sunday.  The  Coalition Government  is also  looking at  using  alternative  trade routes and has asked  the  Export Credit Guarantee Corporation (ECGC) not to  increase  insurance premiums  in the face of  rising  shipping  costs  to Europe. 

  The  Ministry of Commerce and Industry said on Monday that the  Red Sea shipping crisis could  have the biggest  impact  on India’s  exports to  Europe,  as about  80%  of  shipments to Europe  pass  through the  region.  Red Sea  area.  

 This assumes  importance  as  India’s exports of  goods  to the European Union (EU) have  slowed due to  weak  demand  amid  the  war between Russia and Ukraine.  The EU contributes  more than 15%  of  India’s  total  export turnover. Additionally, some environment-related  trade  measures,  such as the  EU’s  carbon border adjustment mechanism and  deforestation  laws, could harm India’s  exports  in the future. 

 The ministry said  there has been an increase in attacks on commercial  ships passing  through the lower Red Sea since mid-November and  that 80%  of  India’s  trade  in goods  with Europe passes  through the  Red Sea. 

  “Costs are  increasing due to  disruptions in  the Red  Sea.  But ultimately it will depend on demand.  US exports  also  pass  through the Suez route.  Transportation costs  are  increasing.  An additional congestion  charge  is also  charged. But if  demand is  high,  shipments  disappear.  

 “If they are not  time-sensitive products,  they will  be relocated. It’s  a global  problem. All goods move  from  east  to  west via  the Red Sea route,”  Commerce Minister  Sunil Barthwal said at a press  conference.  

 The ministry said  the Red Sea region is  important  for  30%  of global container traffic and  12%  of global trade and  that  about  95%  of  ships  have  been  rerouted around the Cape of Good Hope, adding  4,000  to  6,000  nautical miles and  losing  14 to 20  days. for travel. 

  “Transportation  has been  suspended  due to high freight  rates  and surcharges  (according to EPC). Movements  of most  ships have been  affected  and  are often delayed for  2-3 weeks as  incoming  ships  with longer  journeys  are delayed.  Currently,  container availability  is  not  considered  an issue as  there is enough space.  However, the combined impact of  increased shipping  costs, insurance  fees  and longer transit times could make imported goods  much  more expensive,” the ministry  said.

  India’s export  shipments of  low-value  products such as  agricultural products  and textiles to Europe are  mainly  expected to face the impact of  disruptions  in the Red Sea region. 

  Amid  growing  tensions in the West  Asian  region,  Foreign  Minister S Jaishankar  began a two-day visit  on  Sunday.  The  Coalition Government  is also  looking at  using  alternative  trade routes and has asked  the  Export Credit Guarantee Corporation (ECGC) not to  increase  insurance premiums  in the face of  rising  shipping  costs  to Europe.

 The Indian Express  newspaper  reported that freight rates to Europe have more than doubled due to security  tensions  in the Red Sea region.  Concerns about disruption  in the Red Sea region have  grown  and oil prices have begun  to rise  since the US and  UK  attacked Houthi rebels in Yemen  on Friday  in retaliation for  attacks on their commercial  ships.  in the Red Sea  area.

  The commerce ministry  has convened  an inter-ministerial meeting on  January 17, during which  officials from five ministries  (Foreign Affairs, Defense, Transportation, Finance  and  Commerce)  will  develop  a plan to  address the issues. Global  issues  affecting  Indian  business interests.

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 According to  MPI  poverty rate estimates for  2013-14 and 2022-23, Bihar recorded a  53% decline  from  56.3%  MPI  poverty rate  in 2013-14 to  26.59%  in 2022-23. 

  According to a discussion paper released by NITI Aayog on Monday, the proportion  of  India’s  population living in multidimensional poverty is estimated to have  come down  to 11.28 per cent in 2022-23 from 29.17 per cent in  2013- 2014.  In absolute  terms,  NITI Aayog estimates  that  a total of 24.82  million  people  have  escaped multidimensional poverty  over  the  past  nine years. 

  States  such as  Uttar Pradesh, Bihar, Madhya  Pradesh  and Rajasthan recorded the  largest  decline in the number of people classified as poor based on the Multidimensional Poverty Index (MPI), which  takes into account 12  indicators of  different levels of  poverty  across the  three  main aspects, which are  health,  education  and standard of living. 

  The  research report  also notes that  deprivation  levels fell  at a slightly lower rate between 2015-16 and 2019-21  than between  2005-06 and 2013-14.  Deprivation measures the average level  of deprivation  experienced by a  multidimensionally poor  person. 

 At the same time,  the pace  of deprivation  reduction  was faster after  2015-2016  in terms of  poverty MPI  reduction  per  total population compared to the  previous decade, due  to a  lower  number of years. In 2005-06, the  proportion  of MPI poor in  the  total  Indian  population was  55.34%.  The discussion  paper  uses previously  published  MPI data based on  the  National Family Health  Survey  (NFHS) conducted in 2015-15 and 2019-21,  which  also uses NFHS-3 data from 2005-06 to understand long-term poverty trends. 

  Based on these three NFHS datasets, NITI Aayog  has  estimated  poverty  MPI  rates for  the years 2013-14 and 2022-23 with technical inputs from  the  Oxford Policy and Human Development Initiative (OPHI) and United Nations Development  Program  (UNDP). 

  The discussion paper was released by  Prof. Ramesh Chand, Member  NITI Aayog  in the presence of  CEO  NITI Aayog  BVR Subrahmanyam. 

  Professor  Chand noted that without the impact of the coronavirus pandemic, the  MPI  poverty rate  in 2022-23 would have been much  less.  The  article  also notes that it “may not fully reflect the impact of Covid on the  economy,”  as  some  of  the  NHFS-5 data collected  from 2019 to 2021  was collected before the  pandemic .  BVR Subrahmanyam added that India  has the potential  to achieve  target 1.2 of the  Sustainable Development Goals  (SDGs),  which calls for reducing  “by at  least  half the proportion of men, women and children of all ages living in  poverty.”  poverty in all  aspects  according to national  standards”. definitions”. before  2030. 

  According to  the  document, living standards  indicators  showed  the  highest levels of deprivation in 2005-06. For  example, 74.4%  of the population  suffered from  cooking fuel  shortage  in 2005-06,  this number decreased  to  58.47%  in  2015-16  and  then  to  43.9% in 2019-16. 21.  Similarly,  70.92%  of the population  did not have  adequate sanitation  during  2005-06, which  decreased  to  51.88%  in  2015-16  and  then  to  30.93% during 2019-2021.  

 The sharpest decline between  the  two periods was recorded by the  index  measuring  lack  of access to  a  bank  account,  which fell to  9.66%  in 2013-14 from  58.11%  in 2005-06.  According to  MPI  poverty rate estimates for  2013-14 and 2022-23, Bihar recorded a  53% decline  from  56.3%  MPI  poverty rate  in 2013-14 to  26.59%  in 2022-23. Jharkhand also recorded a  50% decline  from  47.13% in the  MPI  poverty rate  to  23.34%.  Uttar Pradesh, which had a  lower  MPI  poverty rate  in 2022-23 than Bihar,  Jharkhand  and Meghalaya, recorded a decline to 17.4 per cent from 42.59 per cent in 2013-14. 

  India’s  definition of multidimensional poverty is measured using  12 indicators,  including nutrition, child  and  adolescent mortality, maternal health, years of schooling, school attendance,  safe  drinking  water safety,  electricity,  housing  and  property. The  MPI seeks to measure poverty  more  comprehensively rather than relying  solely  on income levels to assess deprivation.

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 China is  set to  release its final big  data dump for 2023, capping a difficult year after  emerging  from Covid Zero and  drawing  attention to  its ability to maintain growth  momentum this year. 

  China is  set to  release its final big  data dump for 2023, capping a difficult year after  emerging  from Covid Zero and  drawing  attention to  its ability to maintain growth  momentum this year. 

  Figures  for gross domestic product, industrial production and retail sales are  expected  to  improve year-on-year  in 2022,  thanks to  a  weak comparative  base  as  pandemic restrictions  hinder  economic activity.  According  to economists surveyed by Bloomberg,  GDP likely grew 5.2% for all of last year,  in line with the  government’s  target of  about  5%.  

 Beijing is  predicted  to  reset its  growth target at around 5%  this year, although  that  will  be much more ambitious  due to  the higher base.  According  to a Bloomberg  survey, without stronger stimulus measures, economists predict growth will slow to 4.5%.  

  Here’s  what  to expect when the statistics  office releases the  data on Wednesday: 

 Data Guide 

 The start of 2024  brings  negative news for the economy, as recent data  shows  continued declines in consumer prices,  stagnant  import  growth  and  slowing lending rates – all  of  which suggest Weak  domestic demand will again  be one of  the  country’s  economic  challenges.  in 2024. 

 In the final quarter of 2023,  consensus  forecasts  GDP growth to accelerate to 5.3%.  They said  Bloomberg  Economics’ current broadcast  model estimates the rate could be  slightly  higher at 5.4%, although the margin of error  the  day  before  the NBS  was released was about  0.4  points percent, they said.  

  However, compared  with the previous quarter,  China’s  growth  may  have actually slowed.  Outlook  2024  

 Real estate, which once accounted for a fifth of  China’s  economy along with related  sectors,  remains the biggest threat to growth  prospects  in 2024. 

  Wang Tao, head of  research  Asia Economics Director  at UBS Group AG, said  during  an  event: “If the real estate market cannot stabilize and its decline becomes more severe, then the real estate price correction could worsen, dealing another blow to household confidence.”  last week.  .  

 She said  it’s unclear  when  housing starts,  an indicator  of developer confidence, will  recover. He added that housing  supply will remain abundant as previously unfinished projects  have been  completed and  many property  owners may want to sell,  reducing  demand for new  housing among households. family.  

 Infrastructure spending,  supported  by the government, will  have  to  increase  to counter the  downturn in the  real estate  market. Economists at  Citigroup Inc.  Expect  infrastructure investment growth to  increase  to  about  8.5% this  year,  from an estimated 5.8% in 2023. 

  Consumption  is likely to recover  only  marginally due to  the lack of strong government incentives  such as  direct subsidies to households,  an unstable labor  market  and falling  real estate  prices. Deflationary pressures  are  likely  to continue  due to weak confidence, even if  pork and energy  prices are able to recover.  

 Exports could stabilize in 2024 after  recording  the first annual decline since  2016.  This will be supported by  a recovery in  global  semiconductor demand,  but trade tensions  are  likely  to increase  with major partners  for  products  such as  electric vehicles. 

  More  support  

  Macquarie Group  economists,  including Larry  Hu,  wrote in a note in early  January that policymakers must take “decisive” action to turn around the real estate sector.  One  option, they said,  would be to create a “lender/buyer of last resort” to bail out developers, similar to what the  United States  did during the  global financial crisis.  

 Yao Wei,  chief Asia-Pacific economist at  Societe Generale  SA,  predicts  that  the  People’s  Bank of China will  provide  an additional 650 billion yuan ($91 billion)  in  low-cost funds  this year  under  additional loans are promised  to finance  social  housing  projects.  

 Economists are calling for stronger fiscal policy to  support  growth. Authorities have stepped up fiscal stimulus  measures  by  mobilizing  the central government,  creating breathing space for debt-ridden  local  governments. It’s  a strategy  that  economists  say  will continue  until 2024,  as the government seeks to  restore  confidence.  

 The PBOC  should  also  maintain enough  liquidity  to help banks buy government bonds. A senior official  suggested  the central bank  could reduce  the amount of cash banks must  hold  in reserve, known as the  required  reserve  ratio or RRR. 

 The  People’s Bank of China  maintained  interest rates  on  one-year policy loans on Monday, disappointing investors  who expected  the first  cut  since August. However, there  may  be more room to  cut interest  rates if the US Federal Reserve starts cutting  interest  rates this  year,  as that would ease  downward  pressure on the yuan. 

  Keeping interest rates on  hold means  “the chances  of an RRR cut in February  are higher,” said  Xing Zhaopeng, senior China strategist at  Australia & New Zealand Banking Group Ltd. 

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  In the last financial year,  commercial banks  accounted for  72% of  total credit disbursed, followed by  cooperative  banks (13%) and RRBs (15%). 

  The government is  expected  to set  an  agriculture credit target of Rs  22,000 crore  for the next  financial  year,  a 10 per cent increase over  the current  year’s  target  and possibly exceed,  sources said.  

 Of the current  year’s agricultural  credit target of Rs  20,000 crore,  commercial banks, cooperative banks and regional rural banks (RRBs) have disbursed Rs  16,370 crore, or 81 per cent  of the target in  first three quarters of FY24. 

  “Credit demand  and  disbursement  for agriculture and  related sectors are very  encouraging,” an official said. 

  In FY23,  agriculture credit  growth  was  “strong”  with  disbursements  of  Rs  21.55 trillion, 16%  higher  than the target of Rs 18.5 trillion.  During  FY23,  agriculture credit worth  Rs 1.19 trillion (12%)  was  provided to  allied sectors such as  livestock,  dairy,  poultry  and  fisheries,  out of  a  total  disbursement  of  Rs.18,500 billion.  In the current  financial year,  a sub-target of  Rs 2,930 crore in  credit has been  given to  the  livestock  sector. 

  In the last financial year,  commercial banks  accounted for  72% of  total credit disbursed, followed by  cooperative  banks (13%) and RRBs (15%). 

  However, despite  the  growth  of  agricultural credit, there are  still  institutional challenges such as  disparities  in credit  flows between regions,  lack of land  records,  especially for  cultivators  and  farmers.  tenant  farmer.  Besides, loan waivers announced by  state governments have created willful defaulters,  an official  note said.  In  fiscal year 2023,  agricultural credit  flows  to the southern region  accounted for  48% of  total disbursement while  this  region  only  accounted for  17% of the  country’s total planted area. The  Northern region  receives  about 17% of  total credit  flows  to agriculture and  related sectors, compared to  a  total cultivated  area of  ​​over  20%.  

 However, the eastern  region  received only 8% of the total agricultural credit flow  in the  last  financial year, compared to  the  cultivated  area of  ​​12%. “The proportion of agricultural credit in the Northeast,  East,  Central and  West  regions  is  not  commensurate  with the  proportion of the corresponding regions  in  the total crop area  due to limited credit absorption capacity,”  notes for know.  

 It  also  identifies  factors such as limited  reach  of financial institutions, lack of financial literacy and infrastructure bottlenecks  that explain  regional  disparities  in  credit disbursement.  According to officials,  in  the total credit  disbursed  to agriculture, the share of small and marginal farmers in the total  account  increased from 48.6 million (57%) to 116.6 million (76%) during  the period. period from  FY15  to  FY22.  Total loans  to small farmers  increased  from Rs 3.4 trillion to Rs 10.59 trillion during the same  period,  implying that  capital  investment and  training  are also  progressing  in the  agricultural sector.  

 Under  the Modified Interest Subsidy Scheme  (MISS) of  the Ministry  of  Agriculture,  farmers holding  Kisan Credit Cards (KCC)  are  entitled to borrow up to  Rs  300  at 7%  interest  per annum  to meet  their working capital  needs. Surname.  Currently,  of  the  73.6 million KCC holders, 23.7 million  are in agriculture-related fields.  

  This program  provides  an  additional interest  subsidy  of 3% for  quick loan repayment,  thereby reducing the effective  interest  rate  to 4%. The  Agriculture Ministry  in FY23  released Rs 17,997 crore under MISS to RBI and Nabard against the revised estimate of Rs 19,700 crore for 2022-23. 

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