India to remain fastest-growing major economy, but demand uneven — Reuters poll

A vendor sells tomatoes at a vegetable market in Hyderabad, India, on November 23, 2023. (AFP/File)
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Updated 27 November 2023
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India to remain fastest-growing major economy, but demand uneven — Reuters poll

  • India GDP growth forecast to average 6.4% this fiscal year, 6.3% following year, driven partly by higher government capital expenditure
  • India’s growth would easily outpace most other economies, many of which slowed dramatically following interest rate rises to tame inflation

BENGALURU: India’s economic expansion likely moderated but remained strong in the September quarter, supported by robust service activity and solid urban demand despite a global slowdown dampening export growth, according to a Reuters poll of economists.

Gross domestic product (GDP) growth is forecast to have slowed to 6.8 percent in the July-September quarter from 7.8 percent in the previous quarter, according to the median forecast of 55 economists polled from Nov. 17-27.

But forecasters see that as a minor slowdown from an exceptionally strong quarter for Asia’s third-largest economy, which is expected by the same group of economists to grow more than 6.0 percent over coming years, currently the fastest among major economies.

Even as an erratic monsoon led to a spike in inflation last quarter, consumer demand — which contributes about 60 percent of GDP growth — remained strong in a country of over 1.4 billion people, largely driven by urban dwellers.

Forecasts for the data, due on Thursday, ranged from 5.6 percent to 7.4 percent.

“Headline growth likely remained resilient...with utilities, services and construction showing robust growth. Domestic demand remains the key economic driver of activity, as external demand continues to remain weak,” Rahul Bajoria at Barclays said in a note.

India GDP growth is forecast to average 6.4 percent this fiscal year ending March 31 and 6.3 percent in the following year, driven partly by higher government capital expenditure, according to the wider Reuters poll.

That expected growth would easily outpace most other economies, many of which have slowed dramatically following a historic series of central bank interest rate rises to tame inflation. The Reserve Bank of India’s efforts have been mild by comparison.

Capital expenditure was 4.91 trillion Indian rupees ($58.98 billion) in the first six months of the fiscal year, higher than 3.43 trillion rupees in the same period a year earlier. Economists predict capital spending will climb even higher in the run-up to a national election slated for May 2024.

Asked what would be the primary driver of economic growth for the remainder of this fiscal year, economists were nearly split between government spending (14) and consumption (13). Five said investment.

But consumer demand is not uniform across the world’s most populous country, which contains some of the biggest cities globally. Two-thirds of Indians live outside of cities.

While rural demand took a hit in the July-September quarter due to higher prices for everyday items, urban demand held strong. However, weakness in rural demand is expected to be short-lived.

A strong 69 percent majority of economists who answered a separate question, 20 of 29, said the gap between rural and urban consumption would narrow over the coming two to three years. Six said it would remain the same, and three said it would widen further.

“We expect private consumption growth to recover further as it narrows the gap between rural and urban demand and between goods and services,” Upasana Chachra, chief India economist at Morgan Stanley, said in a note.

Chachra said an improvement in purchasing power as core inflation moderates would help rural consumption.

($1 = 83.2440 Indian rupees)


Ex-leader Jacob Zuma’s party says it will join opposition in South Africa’s parliament

Updated 58 min 3 sec ago
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Ex-leader Jacob Zuma’s party says it will join opposition in South Africa’s parliament

  • ANC and largest rival, the white-led, pro-business Democratic Alliance, agreed on Friday to work together in a coalition

JOHANNESBURG: South Africa’s uMkhonto we Sizwe (MK) party will join an alliance of smaller opposition parties in parliament in a bid to take on the African National Congress and Democratic Alliance-led coalition government, it said on Sunday.
The ANC and its largest rival, the white-led, pro-business Democratic Alliance, agreed on Friday to work together in a coalition it called “government of national unity,” a step change after 30 years of ANC rule.
Two smaller parties, the socially conservative Inkatha Freedom Party (IFP) and the right-wing Patriotic Alliance, will also take part in the unity government.
Former president Jacob Zuma’s uMkhonto we Sizwe party came in a surprisingly strong third in the May 29 election which saw the ANC lose its majority. MK won 14.6 percent of the vote which translated into 58 seats in the 400-seat National Assembly.
However, MK lawmakers boycotted the first sitting of the National Assembly on Friday after filing a complaint at the country’s top court alleging vote-rigging, which the court dismissed as without merit.
Spokesperson Nhlamulo Ndhlela told reporters that the MK party will join the alliance called the “Progressive Caucus,” which includes the Marxist Economic Freedom Fighters (EFF) and the center-left United Democratic Movement.
This alliance commands close to 30 percent of the seats in the National Assembly, Ndhlela said, sitting next to Zuma and the leaders of a number of small parties.
“This united effort is necessary because the 2024 election has also resulted in the consolidation of right-wing and reactionary forces who are opposed to economic freedom, radical economic transformation, racial equality and land repossession,” he said.
Ndhlela said that MK had decided to take up its seats in the National Assembly after receiving legal advice and that it would continue to raise its allegations of a rigged elections in parliament and in courts.


Ukraine summit paves way for peace talks with Russia

Updated 16 June 2024
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Ukraine summit paves way for peace talks with Russia

  • Leaders and officials from more than 90 states spent the weekend for summit dedicated to resolving largest European conflict since World War II
  • Ukrainian President Volodymyr Zelensky voices hope of garnering international agreement around proposal to end the war that he could present to Moscow

BURGENSTOCK: Dozens of countries meeting for a landmark international summit on peace in Ukraine agreed Sunday that Kyiv should enter dialogue with Russia on ending the war, while strongly supporting Ukraine’s independence and territorial integrity.
More than two years after Russia invaded, leaders and top officials from more than 90 states spent the weekend at a Swiss mountainside resort for a two-day summit dedicated to resolving the largest European conflict since World War II.
“We believe that reaching peace requires the involvement of and dialogue between all parties,” stated a final communique, supported by the vast majority of the countries that attended the summit at the Burgenstock complex overlooking Lake Lucerne.
The document also reaffirmed a commitment to the “territorial integrity of all states, including Ukraine.”
The declaration also urged a full exchange of prisoners of war and the return of deported children.
But not all attendees backed the document, with India, Saudi Arabia and the United Arab Emirates among those not included in a list of supporting states displayed on screens at the summit.
After world leaders stood together to offer their support on Saturday, Ukrainian President Volodymyr Zelensky voiced hope of garnering international agreement around a proposal to end the war that he could eventually present to Moscow.
The summit focused Sunday on food security, avoiding a nuclear disaster and returning deported children from Russia as countries outlined building blocks toward ending the war.
The summit, snubbed by Russia and its ally China, came at a point when Ukraine is struggling on the battlefield, where it is outmanned and outgunned.
On Friday, Russian President Vladimir Putin demanded Kyiv’s effective surrender as a basis for peace talks.
Putin’s call for Ukraine to withdraw from the south and east of the country were widely dismissed at the summit.
But the Kremlin insisted Sunday that Ukraine should “reflect” on Putin’s demands, citing the military situation on the ground.
“The current dynamic of the situation at the front shows us clearly that it’s continuing to worsen for the Ukrainians,” Kremlin spokesman Dmitry Peskov said.
“It’s probable that a politician who puts the interests of his country above his own and those of his masters would reflect on such a proposal.”
Russia on Sunday claimed its troops had captured Zagrine village in southern Ukraine, continuing its progress on the front line.
The Burgenstock talks were framed around areas of common ground between Zelensky’s 10-point peace plan presented in late 2022, and UN resolutions on the war that passed with widespread support.
The tight remit was an attempt to garner the broadest support by sticking firmly to topics covered by international law and the United Nations charter.
Countries split into three working groups on Sunday looking at nuclear safety and security, humanitarian issues, and food security and freedom of navigation on the Black Sea.
The session on humanitarian aspects focused on issues around prisoners of war, civil detainees, internees and the fate of missing persons.
It also discussed the repatriation of children taken from occupied Ukrainian territory into Russia.
Talks on food security examined the slump in agricultural production and exports, which has had a ripple effect across the world as Ukraine was one of the world’s breadbaskets before the war.
Talks looked at not only the destruction of fertile land through military operations but also the ongoing risks posed by mines and unexploded ordnance.
Artillery attacks on ships in the Black Sea have driven up the cost of maritime transport.
The nuclear safety group looked at the fragile situation surrounding the safety and security of Ukraine’s nuclear power plants, notably Zaporizhzhia, where all of the reactors have been shut down since mid-April.
Talks honed in on reducing the risk of an accident resulting from a malfunction or an attack on Ukraine’s nuclear facilities.
“When a just and sustainable peace comes, we will all be there to help Ukraine rebuild,” Canadian Prime Minister Justin Trudeau said in the final address from invited leaders.
“The people who lost their lives, the families destroyed, they won’t be able to bring them back. That’s the most painful consequence of war: the human suffering.
“This illegal war by Russia needs to end,” he said, while accepting that “it won’t be easy.”
Minds also turned to a potential second summit, at which Ukraine wants to present Russia with an internationally-agreed plan for peace.
Swiss President Viola Amherd said in her closing remarks: “One key question remains: how and when can Russia be included in the process?
“We have heard it in many of your statements: a lasting solution must involve both parties,” she said, while acknowledging that “the road ahead is long and challenging.”
Zelensky did not say whether he was prepared to engage with Putin directly in talks to end the conflict, though he has in the past ruled out direct talks with him.
“Russia should join this process because Russia is responsible for the starting of the process that’s called the war,” Georgian President Salome Zourabichvili told reporters.


UK ‘morally incoherent’ in supplying arms to Israel, aid to Gaza: Oxfam chief

Updated 16 June 2024
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UK ‘morally incoherent’ in supplying arms to Israel, aid to Gaza: Oxfam chief

  • Halima Begum criticizes stance of Britain, Western leaders

LONDON: Providing arms to Israel while offering humanitarian aid to Gaza at the same time is “intellectually and morally incoherent,” the head of Oxfam GB has told The Guardian.

The remarks followed Oxfam’s approval to formally intervene in a legal challenge opposing UK arms sales to Israel.

The judicial review is being brought by the Palestinian human rights group Al-Haq and the UK-based Global Legal Action Network.

Israel’s assault on Gaza has killed more than 37,000 Palestinians, the majority being women and children, according to the Gazan Health Ministry.

Recent government data shows that the UK issued 108 arms export licenses to Israel between the Oct. 7 attacks and May 31, without rejecting or revoking any during this period.

Halima Begum, Oxfam GB’s chief executive, who recently returned from Israel and the occupied West Bank, criticized the UK’s stance.

She told The Guardian: “Whether you say they are components or whole weapons (being sold) is a moot point, because individual components collectively constitute these devices that are killing so many innocent people.

“The UK needs to stop selling these arms. The government can’t simultaneously give humanitarian aid and talk about its aspirations for peace in the region, then also ship bombs — it’s intellectually and morally incoherent.

“That the law doesn’t prevent the trade seems immaterial. If you knowingly sell weapons that are being used to kill thousands of innocent children and their parents, why would you continue?”

While Begum was unable to enter Gaza due to Israel’s attack on Rafah, she said she was left “shell-shocked” after hearing firsthand accounts of the humanitarian crisis from Palestinian colleagues evacuated from the enclave.

She highlighted historical precedents for the UK and US refusing to arm Israel, noting decisions in 1982 and 2002.

Begum said: “Margaret Thatcher halted weapons exports to Israel during the Lebanon War. Ronald Reagan suspended shipments of cluster munitions in July 1982 and he was reportedly so shocked by images of dismembered Palestinian children in a bombardment on Aug. 12 that he warned Israeli PM Menachem Begin ‘our entire future relations are at stake if this continues.’

“Israel ordered a complete ceasefire before the day was out. So, it wouldn’t be the first time a British or US government has drawn a moral line.”

She added: “Gazan children are being bombed, suffering from malnutrition and facing potential famine and the UK still can’t constrain the Israeli military. It defies belief we’d support this action; our humanity seems to be seeping away.”

Begum also noted that the Global South was largely unified on the need for action regarding Gaza and that it appeared to be “only Western leaders that don’t see what is morally the right thing to do.”

She added: “If you have a friend and their behavior is atrocious, you’re still able to say, ‘Look, as friends, you shouldn’t be doing that.’ That doesn’t mean you can’t offer your support to a friend.

“I feel as though that whole construction around Israel’s right to self-defense, every country has a right to defend themselves, but not at the cost of humanitarian law being ripped up in shreds, without any reference to human rights on the ground.”

The UK government declined to comment.
 


Swedish diplomat in ‘seventh heaven’ following release from Iran

Updated 16 June 2024
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Swedish diplomat in ‘seventh heaven’ following release from Iran

  • “I have been waiting for this for almost 800 days,” Floderus said

STOCKHOLM: Swedish citizen Johan Floderus said he was in seventh heaven following his release from an Iranian prison on Saturday, in a recording published on the Swedish government’s website on Sunday.
Sweden and Iran carried out a prisoner exchange on Saturday with Sweden freeing a former Iranian official convicted for his role in the mass execution and torture of political prisoners in Iran in 1988, while Iran released two Swedes being held there.
“I’m in the sky but emotionally I’m in seventh heaven. I have been waiting for this for almost 800 days,” Floderus said in a recording of a telephone call between him and Swedish Prime Minister Ulf Kristersson while he was on the flight back to Sweden.
Floderus, a European Union employee, was arrested in Iran in 2022 and charged with spying for Israel and “corruption on earth,” a crime that carries the death penalty.
He said he had dreamt of the day of his release endless times. “Only to later wake up on that damn concrete floor,” he said. “Now it is starting to sink in that I have left Iranian airspace and I am on my way back home again.”
In a radio interview earlier on Sunday, Kristersson dismissed criticism from the wife of Swedish-Iranian dual national, Ahmadreza Djalali, who remains in an Iranian jail after Tehran refused to include him in the exchange.
“I have a lot of respect for her disappointment, but don’t really understand the criticism. The alternative would have been to leave the two Swedes who could now come home,” he told Swedish radio.


Labour steps up efforts to win Muslim votes ahead of election

Updated 16 June 2024
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Labour steps up efforts to win Muslim votes ahead of election

  • Party is targeting 13 typically pro-Labour seats with Muslim populations greater than a fifth of the total
  • Labour is concerned its record on Gaza might cost it support ahead of polling day, despite 63% planning to back it on July 4

LONDON: The Labour Party is increasing its campaigning in areas where it fears losing votes over its stance on the war in Gaza ahead of the upcoming UK general election on July 4.

The party has identified 13 typically pro-Labour constituencies in areas with large Muslim populations where it is directing activists to focus their activities.

Labour is set to win a vast majority at the election, but losing such seats could prove an embarrassment for leader Sir Keir Starmer.

The Labour website identifies the 13 target constituencies with Muslim populations greater than 20 percent of the total on a larger list of 28 seats for people registering to canvass for the party ahead of the election. They include seats in the typical Labour strongholds of Birmingham, Luton and Bradford.

The party has already suffered at the hands of voters disgruntled by Sir Keir’s approach to Israel’s military campaign in Gaza, losing the Rochdale by-election to former Labour MP George Galloway.

Nationwide local elections in May also saw a lower-than-expected turnout in some areas, with Muslim voters in particular avoiding voting for the party where they might once have been expected to after Sir Keir proved reluctant to back calls for a ceasefire in Gaza and even suggested Israel “has the right” to cut off electricity and water supplies to the enclave.

Sir Keir later clarified he meant Israel had a “right to self-defense” and Labour has subsequently backed calls for a ceasefire, but some within the party fear significant damage has been done to its reputation with British Muslim voters.

The party is still expected to perform well overall with the Muslim community, with recent polling by Savanta suggesting 63 percent plan to vote Labour on July 4, many citing healthcare and the economy as more pressing concerns than Gaza. Around 20 percent of Muslim voters cited the war as their main electoral concern.

However, over 40 percent placed Gaza in their top five ranking of issues most important to them, with 86 percent of those also saying they would consider voting for an independent candidate running on a pro-Palestine platform.

The organization Muslim Vote has published a list of alternative candidates running on similar platforms, including calling for a ceasefire, sanctions on Israel and demanding more action on Islamophobia.

The director of the British Future think tank, Sunder Katwala, told the Observer: “I think it makes sense for (Labour) to worry, and to be seen to worry, and to be putting energy into (Muslim communities). Across the whole of British society, this is the demographic group where it’s most likely that Labour might slip backwards in support, not gain in support.

“The evidence in the local elections was of a surprisingly big impact. And the evidence in the national polling is of a surprisingly small impact. And that might be because voters are thinking strategically about the use of different elections.”

He added: “The Labour party is losing votes among Muslims and not any other group but is probably more popular among Muslims than any other section of the electorate.

“I think the (Muslim) student (activist) group is deserting Labour, and their mums and dads and grandparents are probably sticking with Labour much more.”