India not invited at G7 meet in Canada 'yet another big diplomatic bungle': Congress
Canada is hosting the summit from June 15 to 17 that is expected to deliberate on pressing challenges facing the globe including the Russia-Ukraine conflict and the situation in West Asia.
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United News of India
an hour ago
- United News of India
Trump and Putin discuss Ukraine situation, Istanbul talks in 70-min phone call
Moscow/Washington, June 5 (UNI) US President Donald Trump and his Russian counterpart Vladimir Putin discussed the Russia-Ukraine conflict and the situation in the Middle East in a telephonic conversation lasting 70 minutes on Wednesday, Kremlin aide Yuri Ushakov said. T he conversation began with the discussion of the situation around Ukraine, and Putin told Trump in detail about the results of the second round of Russia-Ukraine talks in Istanbul, Ushakov said, adding that the presidents also discussed the situation in the Middle East. The telephonic conversation lasted 70 minutes, Ushakov said. "About an hour ago, our president's fourth telephone conversation with US President Donald Trump ended. This conversation this time lasted about 1 hour and 10 minutes," Ushakov told reporters. Both presidents described their exchange as positive and productive, and confirmed readiness to stay in constant contact with each other, Ushakov added. "On the eve of this conversation, telephone conversations took place between various representatives of Russia and the United States. And during these conversations, it was agreed that in the current situation, immediately after these terrorist attacks by the Kiev regime and following the results of the second round of Istanbul talks, it would be worthwhile to hold a telephone conversation between the leaders. "This was agreed upon, and the leaders then gave the appropriate commands to both the administration in Washington and our team here to specifically agree on the time," Ushakov said. UNI/SPUTNIK ANV SSP
CNBC
3 hours ago
- CNBC
What Germany's Merz wants to tackle in Trump meeting
German Chancellor Friedrich Merz is set to meet U.S. President Donald Trump on Thursday, with much to discuss at a time of trade disputes and ongoing war in Europe. During both of his presidential terms, Trump has triggered tensions between long-standing allies U.S. and the European Union. "The tone is as rough as it has not been in a long time," German Foreign Minister Johann Wadephul said in a speech on German-U.S. relations earlier this week. White House officials have not always found friendly words for Berlin in recent months, and vice versa. But there have been some signs of rapprochement, with the country's leaders now reportedly being on a first name basis after several phone calls. Building on this will be a top priority for Merz in D.C. "Top of the agenda for the German Chancellor will be to strike the right chord with Trump," Jörn Fleck, senior director of the Europe Center at the Atlantic Council, told CNBC. Merz's conservative views on immigration, his links to U.S. businesses — the chancellor is a former BlackRock executive — "and a profile as an old-school outsider who was underestimated but won an election by pledging to restore his country's economy and security," could work in his favor, Fleck explained. Export-reliant Germany counts the U.S. as its biggest trading partner, leaving it vulnerable in the face of Trump's trade agenda. Penny Naas, who leads on the German Marshall Fund's allied strategic competitiveness work, told CNBC that this is especially true for sector-specific tariffs, for example targeting autos and steel. They "hit industries at the core of the German economy," she said. "Merz will want to see if there is any room for negotiation on these tariffs," such as the U.S. and EU cutting all industrial duties to zero, Naas added. Trump's so-called reciprocal tariffs, which have also been imposed on the European Union, are also set to be on Merz's agenda, Franziska Palmas, senior Europe economist at Capital Economics, told CNBC. "He is likely to stress his support for free trade and a EU-US trade deal. He may point to the EU's proposal of a zero-for-zero tariff deal as an ideal outcome," she said. Negotiations between the EU and U.S. have so far been tough, but European Trade Commissioner Maros Sefcovic on Tuesday signaled talks were "advancing in the right direction." The Russia-Ukraine war will also almost certainly be discussed, especially after Trump's Wednesday phone call with Russian President Vladimir Putin. European leaders have pushed Trump to apply pressure on Putin, and Merz is expected to follow suit, the Atlantic Council's Fleck said. Palmas meanwhile said Merz would likely "reiterate Germany's strong support for Ukraine and the need for European countries to be involved in peace negotiations." U.S. support for Kyiv has been uncertain, along with Trump's focus on expediting peace-making between Russia and Ukraine — raising concerns in Europe. Topics like U.S. support for European troops on the ground, enforcing sanctions and sharing information may therefore come up, Fleck added. Another critical topic will be the NATO military alliance in which both Germany and the U.S. participate and specifically members' defense contributions. Trump has long been pushing for these expenditures to rise to 5% of each country's gross domestic product, meeting some resistance. Fleck noted that "Merz will want to make sure Germany is no longer seen as a laggard on defense spending and capabilities." Given Germany's recent fiscal reforms that allow for higher defense costs and its support for Trump's 5% NATO spending target, the German chancellor should have "a positive story to tell" on this front. Capital Economics' Palmas added that Merz may even use the occasion to announce a specific defense spending target.
Economic Times
5 hours ago
- Economic Times
Why RBI will hit a hattrick of 25 bps rate cut tomorrow
This move aims to boost economic activity, encourage borrowing and investment, and foster job creation, marking the third consecutive rate cut. The global setting is characterized by heightened geopolitical tensions, viz., Russia-Ukraine war, the Middle Eastern situation, etc., and a precarious fisc with ' tremendous ' pressures for more spending on defense, climate, and aging populations. These aspects are starkly reflected in global public debt mounting to 100 % of global GDP by the end of the decade (IMF's Fiscal Monitor) and higher long-term borrowing costs. An uncertain global trading system marked by trade protectionism and tariff turmoil causes extensive concern. Geopolitical events heightened economic instability, amplified sector-specific risks, and intensified regulatory uncertainties. These geopolitical events accentuated global tensions, disrupted trade, and made the global markets volatile, affecting investor confidence and capital flows into emerging markets like India. This assumes greater significance for energy, infrastructure, and manufacturing, which are sensitive to international trade dynamics and supply chain disruptions. The Court of International Trade struck down President Donald Trump's sweeping ' Liberation Day ' tariffs, ruling that he lacked the 'unbounded authority' to impose across-the-board import taxes on the entire world under the International Emergency Economic Powers Act. These concerns have been exacerbated by President Donald Trump's 1000-page ' Big, Beautiful Bill .' While the Bill is ' big ,' there have been concerns about its ' beautiful ' nature due to a hike in the USA's already bloated and unsustainable deficit resulting from extended tax cuts and an aggravated skew in the distribution of income and wealth. The US grew by 2.8 % in 2024. But, in January-March 2025, growth turned -0.2 % due to policy uncertainties and geopolitical risks. The Fed is wary of cutting rates, despite declining growth prospects. Further, the labour market was expected to weaken, with the unemployment rate likely to exceed its natural rate by the end of this year. Overall, risks are tilted to the ongoing policy uncertainty, the Eurozone's Economic Sentiment Indicator rose 1pt to 94.8 in May because of an upgraded outlook for household finances and industrial performance. In the UK, a sustainable world trading system is basic to the economy. While trade facilitates specialization and productivity, post-COVID supply-chain frailty has damaged the rules-based system. The ominous impact of trade wars and escalating tariffs on growth and inflation across countries has been effectively demonstrated. Shared prosperity necessitates a more connected, secure, and efficient trading environment - an environment marked by strong standards and international cooperation. Major central banks, including the US Federal Reserve, the European Central Bank, and the Bank of England, are expected to adopt a dovish stance, keeping interest rates low to bolster languishing economic Indian Macroeconomy India's economy rose 7.4% in Q4 of FY 2025, exceeding expectations, despite heightened global uncertainties. This is the strongest quarterly growth in FY 25, accelerating from 5.6 % growth in Q2 and 6.4% in Q3. India's GDP growth rose 6.5% in FY 25, the lowest in four years (9.2 % in FY 24 and 7.6 % in FY23). The growth outlook in Asia's third-largest economy remains relatively robust, making it the world's fastest-growing major economy again, thanks to strong domestic consumption, government investments, and a relatively lower dependence on exports. Sectorally, manufacturing, construction, financial real estate, professional services, and public administration, defence, etc., performed well. However, private consumption growth slowed, and government final consumption expenditure shrank in Q4 of FY25 after two quarters. ' Improving domestic consumption is likely to support industrial activity... domestic consumption demand to improve, driven by healthy agricultural growth, easing inflation, supporting discretionary spend and income tax relief this fiscal '. But this growth will require continued recovery in domestic demand and support from both monetary and fiscal stimulus. The real GDP growth reflects the economy's underlying strength and resilience, driven by robust domestic demand, sustained government capex, and gradual recovery in private investment. Industrial production rose modestly to an eight-month low of 2.7% in April 2025 (5.2% in April 2024), and a 4% rise in industrial output in FY 25, which was the lowest in four years. While manufacturing (3.4%) and electricity (1.1%) grew, mining shrank (0.2%) in April, the first since August 2024. Persisting contraction in consumer non-durables' output for the third successive month manifested in low rural consumption despite CPI inflation reaching an almost 6-year low at 3.16% in April. India's foodgrain production rose 6.6 % to reach 354 million tonne (MT) in FY 25, including record production of all major crops, rice, paddy, maize, wheat, etc. India's economic trajectory remains resilient despite global headwinds and regional geopolitical tensions, including persistent border concerns with Pakistan, because of a ' pickup in private consumption, healthy balance sheets of banks and corporates, easing financial conditions, and the government's continued thrust on capital expenditure '. India will continue to be the fastest-growing major economy in the world and consolidate its economic size and heft in the comity of nations. While external uncertainties, such as supply chain disruptions and energy market volatility, pose challenges, India continues to benefit from demographic dividend, ascendant middle class, huge markets with rising consumption demand, strong service sector performance, an accent on infrastructure and capex, a stable banking system, and improving manufacturing output under schemes like PLI. External sector risks, tariff disputes, ease of doing business, credit delivery to the target group, tax reforms, and expenditure rationalization, however, cause some concern. Credit growth is expected to remain robust, driven by economic growth, consumption, and investment. Bank credit moderated to 11.2 % as on April 18, 2025, compared to 15.3 % in the previous year. Domestic bond yields fell to multi-year lows because of successive rate cuts and liquidity-boosting measures by the RBI. Both credit and monetary conditions are in sync with the RBI's plan to support the economy while containing remains volatile because of advance tax and GST outflows and government cash balances with the RBI. Liquidity remained in surplus as reflected in average daily net absorption under the liquidity adjustment facility (LAF), increasing to ₹1,605 crore during FY 25 from ₹485 crore in FY 24. The RBI conducted market operations, including open market operations (OMO) purchases, USD/INR buy/sell swaps, and longer tenor variable rate repo (VRR) operations, besides reducing the CRR by 50 bps (in two tranches of 25 bps each), to provide durable liquidity to the system. The RBI transferred ₹2.69 lakh crore surplus to the government. Inflation remained within the target in FY 25, aided by easing vegetable prices. Headline inflation moderated to 4.6 % during FY 25 from 5.4 % in the previous year, largely driven by moderating core (CPI excluding food and fuel) inflation to 3.5 % and deflation in fuel at 2.5 %. However, the rise in core inflation in the second half of the year occurred because of surging global gold prices. Other tailwinds are above normal monsoon, early arrival of the southwest monsoon, elevated reservoir level, favourable rainfall outlook, and softening food inflation. Crude prices are expected to remain volatile because of global demand, supply disruptions, and geopolitical inflation softened to 3.2 % in April, the lowest since July 2019, from 3.3 % in March because of a sustained fall in food prices. CPI inflation is expected to remain range-bound, driven by factors such as food prices, fuel prices, and economic growth. With benign inflation (inflation remaining below the 4 % from February to April 2025) and plunging inflation, the CPI is likely to durably align with the 4 % target over 2 months, inducing the RBI to cut policy rates by 25 bps to 5.75 % in June. A downward bias in FY26 CPI inflation will be symptomatic of the depth of the rate-cutting is expected to moderate from 4.9% in FY25 to 4.3% in FY26. However, inflationary risks persist because of global commodity prices and any escalation in geopolitical tensions. Under the flexible inflation targeting (FIT) framework, the RBI has been mandated by the government to maintain CPI at 4 % with a band of +/-2 %. Decelerating inflation and moderate growth warrant ' monetary policy to be growth supportive, while remaining watchful about the rapidly evolving global macroeconomic conditions ' (RBI's Annual Report for 2024-25). The RBI is likely to revise its projections on real GDP and inflation for RBI has already cut the Repo Rate twice in 2025- in February and in April, by 25 bps each. These cuts reduced the key lending rate to 6%. Further, the RBI also changed its stance from 'neutral' to 'accommodative' in April. Accordingly, most banks reduced their repo-linked lending rates. Lenders also lowered their marginal cost of funds-based lending rate (MCLR), with a beneficial impact on interest-rate sensitive segments, viz., real estate, small businesses, and home loans.A further 25-bps cut in the Repo Rate will drive economic traction, promote borrowing, investment, and growth, and enhance job creation by making it cheaper for people to borrow money. A 25-bps reduction in the Repo Rate will cause a corresponding drop in all external benchmark lending rates (EBLR), with equated monthly installments (EMIs) on home and personal loans decreasing by 25 bps. A boost in real estate will have a multiplier effect on the economy, particularly in sectors like cement, steel, and construction would be the third consecutive reduction in the Repo rate since February 2025. Since inflation is within the RBI's target band, and given the likely growth-inflation dynamics, we expect another reduction of 50 bps in FY26. The MPC is likely to retain the 'accommodative' monetary policy stance adopted in April 2025. (The author is Chief Economist, Infomerics Valuation and Ratings) (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
