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Europe top stories: weekly summary
LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 6 December. INSIGHT: Global plastics plan pushed down the road, production remains in the spotlight With the idea of a global binding accord on how to handle plastics waste kicked back into the long grass for now, negotiations have progressed but the key points of disagreement still seem fairly intractable. 2024’s relative stability in key commodity pricing a contrast to previous US election years Heading into 2025, there are a plethora of factors which chemical markets players are tracking to see what could impact pricing and fundamentals, but key among them is the arrival of a new US President. Eurozone economy contracts as chemicals operating rates plunge; outlook grim The eurozone economy has started to contract again according to the latest composite purchasing manager index (PMI), while regional chemical industry operating rates continue to fall sharply. GPCA ’24: Lack of recycling root cause of plastics pollution, Dow says Dow has attributed problems with plastics pollution to a lack of plastics recycling and not production, the US producer’s chair and CEO said at the 18th Annual Gulf Petrochemicals and Chemicals Association (GPCA). UPDATE: GPCA ’24: Bahrain to host 2025 GPCA Forum Manama, the capital of Bahrain, will host the 19th Annual Gulf Petrochemicals and Chemicals Association (GPCA) Forum on 8-11 December 2025, according to GPCA promotional material seen by ICIS.
S Korea bourse extends fall as political woes deepen; petrochemical shares slump
SINGAPORE (ICIS)–South Korea’s benchmark stock index continues to bleed on Monday amid political instability wrought by the shock martial law announcement on 3 December, with impeachment motions against President Yoon Suk Yeol dropped over the weekend due to lack of quorum. KOSPI composite index falls for fourth session Petrochemical shares tumble along; Nov exports fall 5.6% year on year Yoon may be stripped of presidential powers At the close of trade on Monday, the KOSPI composite index shed 67.58 points or 2.78% at 2,360.58, with shares of major petrochemical companies slumping. The Korean won also weakened sharply against the US dollar. The pair was trading W1,437.27 as of 07:04 GMT. When martial law was declared late on 3 December, the won tumbled to a near two-year low above W1,440 levels versus the greenback. PETROCHEMICAL EXPORTS FALLINGSouth Korea is a major exporter of ethylene, as well as aromatics, such as benzene, toluene and styrene monomer (SM). The overall industry is reeling from a combination of weak external demand and overcapacity in China. South Korean industries, including chemicals, rely heavily on exports to China, whose self-sufficiency has grown over the years. In November, South Korea’s petrochemical exports declined by 5.6% year on year to $3.6 billion. In the first 11 months of 2024, however, its petrochemical export volume increased by 7.5% year on year, the Ministry of Trade, Industry and Energy (MOTIE) said on 5 December. Market players said that port operations in Daesan have been unsteady because of strong winds, causing delays in cargo deliveries. “Petrochemical exports are facing difficulties due to unforeseen factors such as falling product prices linked to oil prices and bad weather,” the first vice minister of MOTIE Park Sung-taek said after a recent visit to the refinery of Hyundai OIlbank and the production/export site of Hyundai Chemical. For Hyundai Oilbank, the arrival of five carriers and three crude oil import vessels were delayed because of inclement weather in late November, while delays also hit shipment of five product carriers of Hyundai Chemical, MOTIE noted. “In order to prevent disruptions in exports, we will diversify the types of oil reserves from the existing heavy crude oil to light crude oil in consideration of the types of oil used by each refinery, and greatly simplify the oil reserve lending process so that companies can quickly provide oil reserves when necessary,” Park said. EMERGENCY MEETINGS OF FINANCIAL REGULATORS CONTINUEThe economic managers of Asia’s fourth-largest economy – led by Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok – have been holding daily emergency meetings before markets open to ensure financial markets stability, keeping their promise to provide “unlimited liquidity”. “The participants agreed that, as domestic and international uncertainties still persist, relevant organizations should maintain a closer emergency cooperation and response system and mobilize all capabilities to respond in order to minimize the economic impact of the political situation. In a statement on Monday, the Ministry of Economy and Finance said that “as domestic and international uncertainties still persist, relevant organizations should maintain a closer emergency cooperation and response system and mobilize all capabilities to respond in order to minimize the economic impact of the political situation”. South Korea intends to activate a market stabilization fund worth won (W) 40 trillion ($28 billion) following the country’s brief dalliance with martial law, with its slowing economy facing the prospect of increased US tariffs in 2025. For the stock market, the MOEF said that W30 billion of the value-up fund “has already been invested”, with W70 billion to be injected this week, with another W30 billion scheduled to be implemented sequentially. YOON SURVIVES IMPEACHMENT BUT MAY BE STRIPPED OF POWERSBecause of lack of quorum, South Korean President Yoon managed to survive impeachment on 7 December, which was set into motion following his declaration of a six-hour long martial law that disrupted markets. “The impeachment vote failed to gain the 200-vote hurdle needed to suspend the president from duties,” Singapore-based UOB Global Economics & Markets Research said in a note on Monday. “The opposition bloc needed only eight votes from the ruling PPP [People Power Party] to impeach Yoon as votes by three PPP members had prompted protesters outside the National Assembly to chant “five more to go,” it said. On 8 December, PPP leader Han Dong-hoon said that Prime Minister Han Duck-soo will manage the nation’s affairs as an exit plan for Yoon is being prepared, the constitutionality of which is being questioned by the opposition Democratic Party of Korea (DPK). Focus article by Pearl Bantillo Additional reporting by Jonathan Yee Thumbnail image: Lawmakers in the voting chamber during the plenary session for the impeachment vote of President Yoon Suk Yeol at the National Assembly in Seoul, South Korea on 7 December 2024.(JEON HEON-KYUN/POOL/EPA-EFE/Shutterstock)
Asia top stories – weekly summary
SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 6 December 2024. India cuts banks’ cash reserves ratio by 50bps; lowers full-year GDP forecast By Priya Jestin 06-Dec-24 17:51 MUMBAI (ICIS)–India’s central bank on Friday maintained its benchmark interest rate at 6.5% but cut its cash reserve ratio (CRR) by 50 basis points to 4%, in a bid to improve growth and rein in high inflation. Mideast PMDI, TDI fall on weak demand amid high freight costs By Isaac Tan 06-Dec-24 15:24 SINGAPORE (ICIS)–Prices for both polymeric methylene diphenyl diisocyanate (PMDI) and toluene diisocyanate (TDI) in the Middle East have decreased this week, reflecting a general slowdown in demand as the year comes to a close. GPCA ’24: Europe chemical industry faces price pressure from US tariffs on ChinaBy Jonathan Yee 05-Dec-24 19:15 MUSCAT (ICIS)–An incoming Trump administration in the US and the promise of tariffs on all foreign goods will likely upend the global world order, placing pressure on the European chemical industry amid ensuing price volatility, senior industry figures warned this week. S Korea prepares $28 billion market stabilization fund after martial law By Pearl Bantillo 05-Dec-24 15:28 SINGAPORE (ICIS)–South Korea is preparing to activate a market stabilization fund worth won (W) 40 trillion ($28 billion) following the country’s brief dalliance with martial law, with its slowing economy facing the prospect of increased US tariffs in 2025. UPDATE: Indonesia begins antidumping probe on PP homopolymers By Jackie Wong 05-Dec-24 15:12 SINGAPORE (ICIS)–Indonesia has initiated an antidumping investigation on imported polypropylene (PP) homopolymer products, according to a government document obtained by ICIS on Thursday. INSIGHT: GPCA ’24: GCC petrochemical players sharpen focus on longer-term sustainable growth By Nurluqman Suratman 04-Dec-24 19:33 MUSCAT (ICIS)–Gulf Cooperation Council (GCC) petrochemical executives met with global colleagues in Muscat, Oman, this week as the focus on sustainable growth continues to sharpen amid concerns over oversupply, trade protectionism and geopolitical conflicts. INSIGHT: Political instability rocks South Korea after martial law; no petrochemical impact so far By Pearl Bantillo 04-Dec-24 19:06 SINGAPORE (ICIS)–Days before the shock declaration of martial law in South Korea by President Yoon Suk-yeol, political wranglings stalled the 2025 budget deliberations of Asia’s fourth-biggest economy. GPCA ’24: Thailand’s PTTGC to start SAF production in early 2025 – CEO By Nurluqman Suratman 04-Dec-24 18:00 MUSCAT (ICIS)–Thailand’s PTT Global Chemical (PTTGC) is expected to begin producing sustainable aviation fuel (SAF) at its refinery in Map Ta Phut early next year, the company’s CEO Narongsak Jivakanun said. S Korea President Yoon may face impeachment after short-lived martial law By Pearl Bantillo 04-Dec-24 14:07 SINGAPORE (ICIS)–Calls for South Korean President Yoon Suk Yeol to resign are growing after his hours’ long martial law that rattled the country’s equities and foreign exchange markets. GPCA ’24: INSIGHT: Middle East PP has leading global competitive position By Emiliano Basualto 02-Dec-24 13:00 MUSCAT (ICIS)–The Middle Eastern polyolefin industry has always been recognised for its competitive advantages, particularly driven by access to inexpensive raw materials and low energy costs. GPCA ’24: GCC needs to formulate right partnerships – GPCA chief By Nurluqman Suratman 02-Dec-24 09:59 MUSCAT (ICIS)–Gulf Cooperation Council (GCC) petrochemical players must formulate strategic international partnerships and invest in optimization and innovation to remain competitive, according to the secretary general of the Gulf Petrochemicals and Chemicals Association (GPCA).

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SHIPPING: Asia-US container rates fall, but average global rates rise as possible port strike nears
HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US were flat to softer this week while global average rates rose by 6%, but the looming strike at US Gulf and East Coast ports could put upward pressure on rates in the coming week. Rates from supply chain advisors Drewry showed Shanghai-New York rates fell slightly to $5,160 from $5,182, while rates from Shanghai to Los Angeles plunged by more than 12%, as shown in the following chart. The previous chart also shows the sharp increases in rates from Shanghai to Rotterdam and Genoa, which contributed to the global average increase as shown in the following chart. Drewry expects an increase in rates on the Transpacific trade in the coming week due to the looming ILA (International Longshoremen’s Association) port strike in January 2025 and the anticipated rush to ship goods before the strike begins. The 15 January deadline for finalizing a new labor agreement between unionized dock workers at US Gulf and East Coast ports and the negotiating entity for the ports is nearing with no clear progress on a key remaining issue – automation. Rates at online freight shipping marketplace and platform provider Freightos showed a sharp increase on the Asia-NY trade lane and a 4% decrease from Asia-LA. Rates at Freightos are higher than rates at Drewry. Judah Levine, head of research at Freightos, said the increases on Asia-NY are because of importers again frontloading shipments ahead of a possible strike and to beat tariffs proposed by the incoming Trump administration. Some carriers have already begun introducing general rate increases (GRIs) to try and push rates higher. Levine said the window to move shipments from the East Coast to the West Coast ahead of a possible strike is closing, but many retailers are sitting on significant inventories from pulling forward shipments ahead of the original 1 October strike deadline. “These factors may make early December rate increases difficult to sustain, though prices could increase later in the month or early in January ahead of Lunar New Year,” Levine said. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. LIQUID TANKER RATES Overall, the US chemical tanker freight rates were unchanged this week for several trade lanes, except for the USG-Asia trade lane as spot tonnage remains tight. This all-basis limited spot activity to most regions and as COA nominations are taking longer than usual for the regular vessel owners. They have tried to delay the sailings but there has been very little spot space in the market leaving no other options for full cargoes and in turn impacting spot rates. MEG, ethanol and styrene still are being seen quoted in the market from various traders, for early January loadings to Asia. Eastbound space had not yet been fully absorbed despite the few fresh inquiries for small specialty parcels stemming from USG bound for Antwerp, most owners waiting for full contract nominations. Various glycol, ethanol, methyl tertiary butyl ether (MTBE) and methanol parcels were seen quoted to ARA and the Mediterranean as methanol prices in the region remain higher. Additionally, ethanol, glycols and caustic soda were seen in the market to various regions. PANAMA CANAL Fiscal Year 2024 revenue rose from 2023, the Panama Canal Authority said this week even after having to reduce crossings for part of the year because of a severe drought. The Authority said a noticeable impact from the drought was a decrease in deep draft transits, which fell by 21%. Despite the arrival of the rainy season, the challenge of water for Panama and the Panama Canal remains and serves as a reminder that climate change and its effects are a reality requiring immediate attention and concrete action. Potential solutions include the identification of alternative sources of water from the 51 watersheds and lakes in Panama, along with projects that can increase storage capacity to ensure water availability for the entire Panamanian population and the Canal’s operation, thereby ensuring its long-term sustainability. At the same time, the Panama Canal is exploring additional short- and long-term solutions that can optimize the use and storage of water at the Canal for the benefit of both the local population and its operations. Additional reporting by Kevin Callahan Thumbnail image shows a container ship. Photo by Shutterstock
EU-Mercosur trade agreement welcomed by chemicals producers but loose ends remain
SAO PAULO (ICIS)–EU chemicals trade group welcomed on Friday the “political agreement” between the 27-country bloc and the five-country bloc Mercosur on their free trade deal but, after being 25 years in the making, loose ends for its ratification remain. The agreement, yet to be published in full, must now be ratified by national parliaments as well as executive EU bodies. Considering the backlash it has already caused among some constituencies, such as farmers in France, it is not certain the deal will be ratified swiftly. Deforestation concerns in the Amazon or the sharp differences in workers’ rights in the EU and Mercosur have in the past also presented stones on the way. On Friday, the president of the European Commission – the EU’s main executive arm – told citizens of the 450-million people bloc their “livelihoods are protected”, addressing particularly farmers’ concerns. “This is a win-win agreement, which will bring meaningful benefits to consumers and businesses, on both sides. We are focused on fairness and mutual benefit. We have listened to the concerns of our farmers, and we acted on them,” said Ursula von der Leyen. “This agreement includes robust safeguards to protect your livelihoods. EU-Mercosur is the biggest agreement ever, when it comes to the protection of EU food and drinks products. More than 350 EU products now are protected by a geographical indication. In addition, our European health and food standards remain untouchable.” She added new safeguards had been added to the deal to comply strictly with those standards to access the EU market. Von der Leyen added EU companies will save €4 billion worth of export duties per year. BREATHING SPACE FOR BELEAGUERED EU CHEMICALS?The chemicals industry has always been in favor of the deal on both sides of the Atlantic. The EU’s chemicals trade group Cefic said on Friday its members should “gain an edge” in trade with Mercosur, paramount to compete against other global chemicals players. The EU and Germany – its largest chemicals producer – are net exporters of chemicals. In principle, they have a lot to win with free trade agreements as they can allow them to expand markets as trade barriers are reduced. At the same time, in the global game of trade, large companies also have more to win than small- and medium-size enterprises (SMEs), who do not have the same prowess in terms of reach and influence. Chemicals majors also tend to carry commanding voices in trade groups such Cefic, Germany’s VCI or, within Mercosur, Abiquim. In 2022, trade between the EU and Mercosur stood at €13.6 billion, with a trade surplus in favor of the EU of €5.2 billion, according to Cefic figures. The figures are modest considering the EU’s chemicals industry’s exports stood at €553.0 billion in 2022. The 27-country bloc imported chemicals worth €363.0 billion, so it posted a trade surplus of €190.0 billion, according to the EU’s statistics office Eurostat. This landmark agreement marks a significant milestone in fostering free, fair, sustainable and resilient trade relations between the European Union and the four Mercosur countries Argentina, Brazil, Paraguay and Uruguay. Both Cefic and the EU did not mention Bolivia as a Mercosur member, but the country joined the bloc in July. Venezuela used to be a part of it, but its membership was suspended under the current regime. Cefic and other industrial trade groups in the EU had already urged a rapid conclusion of the agreement in November in an open letter to EU bodies. “The EU-Mercosur Agreement opens tremendous opportunities for both regions. From an EU perspective, it is a crucial opportunity for companies to gain a competitive edge by accessing one of the world’s largest markets,” said Cefic’s deputy director general Sylvie Lemoine. “This agreement enhances market access, enabling EU businesses to compete more effectively on the global stage, fostering economic growth and strengthening the EU’s industrial base. This is fully in line with the spirit of the Antwerp Declaration.” “We now call upon all EU decision-makers to rapidly ratify and bring the agreement into force.” Brazil’s chemicals producers’ trade group Abiquim had not responded to a request for comment at the time of writing, but in the past it has been supportive of the trade deal. Front page picture source: Cefic
Germany chem industry warns about cuts to battery research funding
LONDON (ICIS)–While countries around the world bet on battery technology, Germany has taken a step back with plans to cut funding for battery research – to the dismay of its chemicals and other industries. Battery research key to energy transformation Trying to catch up with China New government may reverse cuts after election With the cuts in the federal government’s 2025 draft budget, the German federal research and education ministry could stop funding new battery research projects as soon as next year. The cuts would also include a reduction in so-called “commitment appropriations” (Verpflichtungsermachtigungen) of more than €100 million for spending on battery research in future years, according to the opposition Christian Democrats. Chemical producers’ trade group VCI said that the cuts would lead to “a loss of added value” and raised the risk of Germany becoming more dependent for batteries on other countries or regions. Germany needed strong research funding in this field in order to catch up with other countries, said Ulrike Zimmer, head of science, technology and environment at VCI. “This is the only way Germany can maintain its chances in competition with the US and China, and also train the urgently needed skilled workers,” she said. The planned funding cuts have already created uncertainties at academic and research institutes, VCI warned in a joint statement this week with trade groups from the machinery, electronics and digital sectors. As it stands, employment contracts could currently not be extended and new contracts could not be signed, the groups said. Research institutions were losing scientists due to the lack of prospects in the battery field, and the technology transfer via collaborations and start-up companies was coming to a standstill, they said. They said the cuts would have far-reaching consequences as they affected all industries involved in the battery value chain: chemical companies, mechanical and plant engineering, cell manufacturers and all industries whose products are based on the performance, price and availability of batteries. Affected sectors included electric vehicles (EVs), stationary storage systems, drones, power tools and robots, among others, they said. TRYING TO CATCH UP WITH CHINA Peter Lamp, head of battery technology at automaker BMW, told a parliamentary committee on Wednesday, 4 December that without powerful batteries, the transformation to a carbon dioxide (CO2)-neutral energy and transport industry was not possible. The availability of modern battery technologies was crucial to successfully implementing the energy transition, he said. Lamp criticized Germany’s current dependence on Asian battery cell suppliers. Germany and the EU needed “technological sovereignty” in this area, he said, adding that the planned reduction in funding was therefore “incomprehensible”. Auto industry trade group VDA said that funding for battery research was of “central significance” for the future of the German automotive industry. The country’s Fraunhofer research institute said in a submission to the committee that government support for battery research was “an essential prerequisite” for the success of Germany’s energy and mobility transition. Battery research played a key role in the development of electrochemical energy storage solutions, as well as battery and production development, it said. China and other Asian countries were far ahead in developing and producing batteries, the institute noted. “In order to counter the dominance of Asian players in battery technology and the associated supply chains, Germany and Europe must constantly build up skills and technologies for large-volume battery cell production for all applications, also as insurance against geopolitical dependency,” it said. NEW GOVERNMENT Government officials have said that the cuts were necessary because the country’s supreme court ruled last year that Berlin needed to trim spending in order to comply with the “debt-brake” (Schuldenbremse), which is a constitutionally enshrined provision to keep public deficits low and limit debt. However, there is a chance that the cuts may be reversed in the event of a change in government in Berlin. Following the collapse last month of Chancellor Olaf Scholz’s coalition government, early elections will likely be held in February. The Christian Democrats, which are ahead of Scholz’s Social Democrats in opinion polls on the election, have said that the cuts to battery research, as well as the abolition last year of an incentive for the purchase of EVs, were “short-sighted”. The party has introduced a motion in parliament calling for “strong battery research in Germany”, which prompted Wednesday’s parliamentary committee hearing. Countries such as China, the US, Japan, and South Korea had nearly tripled public spending on battery research over the past four years while Germany risked falling behind internationally in this important area, it said. The cuts would also jeopardize the support the government already committed for investments in construction for battery plants, the party said, and noted the support the government has granted to a project by Sweden’s Northvolt at the Heide chemicals and refining site northwest of Hamburg. Spending a lot of money on battery factories and significantly less on research and training was “highly risky”, it said. The Northvolt project may not be realized, however. The company last month filed for Chapter 11 protection and reorganization in the US, raising questions about its future and the prospects of the German project. BATTERIES, EVs AND CHEMICALS Batteries and the EVs they power are important market opportunities for the chemical industry. An EV contains more plastics and polymer composites and more synthetic rubber and elastomers than a conventional vehicle powered by the internal combustion engine. However, BASF said earlier this year that market dynamics in the EV sector were slowing, and the company would therefore pause or may not make certain investments connected to the industry. One project on which BASF paused work is a proposed commercial-scale EV battery recycling metal refinery at its chemicals production complex in Tarragona, Spain. GERMANY AUTO INDUSTRY SENTIMENT IN DECLINE Meanwhile, the sentiment in Germany’s automotive industry continued to deteriorate in November, according to the latest survey by Munich-based research group ifo this week. Demand was weak and the industry remained stuck in a “mix of far-reaching transformation, intense competition, and a weak economy”, ifo said. Also, thousands of Volkswagen workers went on a short strike on Monday, 2 December to protest against potential job cuts and plant closures in Germany, and their union, IG Metall, has announced another strike for Monday, 9 December. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). Additional reporting by Tom Brown Please also visit the ICIS topic page Automotive: Impact on chemicals Thumbnail photo source: BASF Focus by Stefan Baumgarten
VIDEO: Europe R-PET sees mixed views on December colourless flake prices
LONDON (ICIS)–Senior Editor for Recycling Matt Tudball discusses the latest developments in the European recycled polyethylene terephthalate (R-PET) market, including: Different views on colourless (C) flake prices in northwest Europe (NWE) Higher bale prices heard but not confirmed in eastern Europe and Poland Outlook for 2025 still a big question mark
Economic growth in eurozone and EU accelerated in Q3, revised data shows
LONDON (ICIS)–Economic growth in both the eurozone and the EU accelerated in Q3, according to official revised data on Friday. Seasonally adjusted GDP increased by 0.4% in the eurozone and the EU from the previous quarter. In Q2, GDP grew by 0.2% in both the eurozone and the EU from Q1, statistics agency Eurostat said in an update from its initial estimate at the end of October. % change from the previous quarter Q1 Q2 Q3 Eurozone 0.3 0.2 0.4 EU 0.3 0.2 0.4 On a year-on-year basis, Q3 GDP increased by 0.9% in the eurozone and by 1.0% in the EU.
India cuts banks’ cash reserves ratio by 50bps; lowers full-year GDP forecast
MUMBAI (ICIS)–India’s central bank on Friday maintained its benchmark interest rate at 6.5% but cut its cash reserve ratio (CRR) by 50 basis points to 4%, in a bid to improve growth and rein in high inflation. Monetary policy stance kept at “neutral” Year-to-March 2025 GDP growth forecast cut to 6.6% from 7.2% High food prices to keep consumer inflation elevated in Oct-Dec 2024 In its monetary policy decision, the Reserve Bank of India (RBI) retained its monetary policy stance at “neutral”. It has maintained the repo rate at 6.5% since February 2023. CRR is the percentage of a bank’s total deposits that it is required to maintain in cash with the RBI as a reserve. India is a giant emerging market in Asia and is a major importer of petrochemicals. The central bank’s hawkish outlook is due to persistently high food inflation, which has yet to stabilize, RBI governor Shaktikanta Das said during his address to the media. While the central bank remains optimistic about India’s growth outlook, following a good monsoon season and an anticipated revival of capital expenditure, global factors could slow down growth, Das said. “Headwinds from geopolitical uncertainties, volatility in international commodity prices, and geo-economic fragmentation continue to pose risks to the outlook,” RBI said in its official statement. The outlook is also “clouded by rising tendencies of protectionism which have the potential to undermine global growth and push inflation higher”, it added. RBI has lowered its GDP growth forecast for the fiscal year ending March 2025 to 6.6%, from 7.2% previously, in view of weak fiscal Q2 performance. India’s GDP for the July-September quarter slowed to an almost two-year low of 5.4%, on sluggish growth and weak demand. It was also significantly lower than the RBI’s projection of a 7% growth for the quarter. RBI GDP Forecasts New – 6 December 2024 Old October-December (Q3) 6.8% 7.4% January-March (Q4) 7.2% 7.4% Fiscal year ending March 2025 6.6% 7.2% April-June (Q1 FY2025-26) 6.9% 7.3% July-September (Q2) 7.3% – Meanwhile, inflation forecast for the current fiscal year was raised to 4.8% from 4.5% on continued high food inflation. “Inflation increased sharply in September and October 2024, led by an unanticipated increase in food prices. Core inflation, though at subdued levels, also registered a pickup in October,” Das said. In October, consumer inflation had risen to a 14-month high of 6.21% due to a spike in food prices. The RBI expects food prices to keep inflation rates elevated in the October-to- December quarter, Das said. RBI inflation forecasts New – 6 December 2024 Old October-December (Q3) 5.7% 4.8% January-March (Q4) 4.5% 4.2% Fiscal year ending March 2025 4.8% 4.5% April-June (Q1 FY2025-26) 4.6% 4.3% July-September (Q2) 4% – Focus article by Priya Jestin
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