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Business Standard
3 days ago
- Business
- Business Standard
India may miss FY26 fiscal deficit target of 4.4% on slower growth: BMI
The government is likely to miss its FY26 fiscal deficit target of 4.4 per cent, though only marginally, as economic growth underperforms projections, according to a report released by BMI, a unit of Fitch Solutions, on Tuesday. The report said potential aggressive US tariff hikes are the primary risk to fiscal improvement and could derail the fiscal consolidation agenda. 'Such a scenario would compromise growth, curtail revenue collection, and likely necessitate increased counter-cyclical spending. This would potentially derail the fiscal consolidation agenda, causing debt accumulation rather than reduction,' the BMI report said. The report forecast the central government's fiscal deficit to narrow from 5.1 per cent to 4.5 per cent of GDP in FY26. The government's fiscal deficit in April-June FY26 was Rs 2.8 trillion, or 17.9 per cent of Budget Estimates (BE), compared to 8.4 per cent in the first quarter of FY25, according to the latest data from the Controller General of Accounts. The report noted that central revenues, now exceeding 10 per cent of GDP, are at levels not seen since FY2010-11 and have remained robust despite the substantial income tax threshold increase from Rs 700,000 to Rs 1.2 million — costing approximately Rs 1 trillion, or 0.3 per cent of GDP. The net tax revenue of Rs 5.4 trillion stood at 19 per cent of BE in the first quarter of FY26, compared to 21.3 per cent in the first quarter last year, registering a contraction of 2 per cent year-on-year. The BMI report expects the general government deficit to improve slightly from 8.2 per cent to 8 per cent of GDP in FY26. 'State governments may increase spending as political competition intensifies, partially offsetting the central government's consolidation efforts,' the report said. BMI's commentary highlighted that the continued narrowing of fiscal deficits should gradually improve India's debt position over the coming decade. 'The government's commitment to fiscal consolidation, even amid economic headwinds and electoral pressures, indicates a clear prioritisation of debt sustainability,' it noted. The report said the government had reduced capital spending from 3.5 per cent to 3.2 per cent of GDP for the first time after seven consecutive years of increases, in order to compensate for the tax cuts. The government's capital expenditure in the first quarter of the current financial year reached Rs 2.75 trillion, or 24.5 per cent of BE. Capex, however, was still lower than 27 per cent of BE in the corresponding period of the pre-election year FY24.
Mint
01-08-2025
- Business
- Mint
Soy futures post weekly loss on expectations for big US crop
CHICAGO, - Chicago Board of Trade soybean futures finished flat on Friday but notched a second consecutive weekly decline as ample global supplies, favorable U.S. weather and weak Chinese demand hung over the market. U.S. farmers were expected to harvest bumper soybean and corn crops this autumn following non-threatening weather conditions. At the same time, they worried that President Donald Trump's latest wave of tariffs may hurt American farm exports at a time when soy and wheat sales have struggled. The United States faces stiff competition for global soy sales from Brazil, the world's biggest exporter of the oilseed. "Expectations of a robust U.S. harvest, alongside a second consecutive record Brazilian crop, are expected to weigh on prices for the remainder of the year," analysts at BMI, a unit of Fitch Solutions, said in a note. CBOT November soybeans ended unchanged at $9.89-1/4 a bushel after falling earlier to the lowest level since April 9. The contract lost about 3.1% for the week. China, the world's biggest soy buyer, faces an August 12 deadline to reach a durable tariff agreement with Trump's administration. The United States believes it has the makings of a trade deal, but it is "not 100% done," Treasury Secretary Scott Bessent said on Thursday. A Chinese buyer signed a deal this week to import 30,000 metric tons of Argentine soymeal, as feed producers move to lock in cheaper supplies from South America, two trade sources said. In CBOT wheat, September futures ended down 6-1/2 cents at $5.16-3/4 per bushel. The contract set a low of $5.16-1/4 a bushel earlier in the session and tumbled 4% for the week as in the Northern Hemisphere brought in new supplies. CBOT corn also slumped, with the December contract closing 3 cents lower at $4.10-3/4 a bushel. It lost about 2% for the week. Export sales of corn have been brisk as buyers take advantage of low prices. The U.S. Department of Agriculture reported exporters sold a total of 352,160 metric tons of U.S. corn to unknown destinations via its daily reporting system. This article was generated from an automated news agency feed without modifications to text.
Zawya
01-08-2025
- Business
- Zawya
Chicago soybeans set for weekly loss on ample supply, weak China demand
BEIJING - Chicago soybean futures edged higher on Friday, but remained on track for a second consecutive weekly decline as ample global supplies, favourable U.S. weather and weak Chinese demand pressured prices. The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.08% at $9.9 per bushel, as of 0301 GMT, still hovering near a four-month low. "Expectations of a robust U.S. harvest, alongside a second-consecutive record Brazilian crop, are expected to weigh on prices for the remainder of the year," analysts at BMI, a unit of Fitch Solutions, said in a note. China, the world's biggest soy buyer, faces an August 12 deadline to reach a durable tariff agreement with U.S. President Donald Trump's administration. The United States believes it has the makings of a trade deal, but it is "not 100% done," Treasury Secretary Scott Bessent said on Thursday. China's soymeal inventories have built up in recent weeks, potentially curbing soybean imports during the peak U.S. marketing season later this year - a bearish signal for American growers. Corn inched up 0.06% to $4.14 a bushel, but was poised to end the week lower amid expectations of a large harvest. Cooler temperatures and periodic rainfall across the U.S. Midwest are expected to support crop development into early August, according to Commodity Weather Group. Still, low prices have helped attract some buying interest. The U.S. Department of Agriculture (USDA) confirmed private sales of 100,000 metric tons of U.S. corn to Colombia, 140,000 tons to South Korea, and 136,000 tons to undisclosed destinations. Wheat rose 0.1% to $5.23-6/8 a bushel but was on course for a second weekly decline, pressured by ongoing winter harvests in the United States and across the globe. "Additional downward pressure is likely in the coming months as the U.S. spring wheat harvest begins, further increasing global supply and alleviating market tightness," BMI said. Separately, the USDA reported 100,000 tons of U.S. hard red winter wheat sale to Nigeria for shipment in the 2025/26 marketing year. Commodity funds were net sellers of CBOT soybean, wheat, and soyoil futures contracts on Thursday, traders said. Funds were net buyers of corn and soymeal futures, they said.
Bloomberg
30-07-2025
- Business
- Bloomberg
Ghana, Tanzania, Uganda FX Reserves Most at Risk if Gold Slumps, BMI Says
Ghana, Tanzania and Uganda face the highest risk in Africa of a plunge in their foreign-exchange holdings if gold prices fall suddenly, potentially putting renewed pressure on their currencies. The three countries already rely on bullion for a significant share of their export receipts, as much as 45% in Ghana's case, 42% in Tanzania's and 35% in Uganda's, according to Fitch Solutions ' BMI unit.
Malay Mail
29-07-2025
- Business
- Malay Mail
BMI: High household debt putting a damper on Malaysian consumer spending
KUALA LUMPUR, July 29 — High household debt levels remain a significant constraint on Malaysia's consumer spending despite an otherwise positive economic outlook, according to a new BMI report. According to the Fitch Solutions firm, household debt reached 69.5 per cent of GDP in the fourth quarter of 2024, up slightly from 69.3 per cent in the previous quarter, based on Bank Negara Malaysia data. 'A high level of household debt remains a risk to our consumer outlook, as it not only constrains future borrowing capacity but impacts current disposable income levels,' BMI said in the report. High debt servicing costs are eating into household spending power even as the central bank begins to ease monetary policy, BMI analysts warned. Consumer confidence has weakened significantly, with the Malaysian Institute of Economic Research recording an average of 87.1 in the first quarter of 2024, down from 89.4 in the fourth quarter of 2023. This represents one of the lowest consumer confidence readings since the second quarter of 2022, when it reached 85.9, compared to a long-term average of 96.5 between 2005 and 2023, the report noted. Retail sales growth has shown signs of softening, coming in at 4.9 per cent year-on-year in May 2025, up from 4.7 per cent in April but marking a notable decline from earlier in the year. Inflationary pressures in essential commodities such as food and fuel continue to weigh particularly heavily on low- and middle-income households, BMI said. People walk in a shopping mall in Kuala Lumpur on August 7, 2024. — Picture by Firdaus Latif Food price inflation, while moderating to 2.1 per cent in June 2025 from an average of 2.5 per cent in the fourth quarter of 2024, remains a key risk factor for consumer spending. The research firm noted that debt servicing costs could rise again if inflationary pressures accelerate and force the central bank to return to interest rate hikes. Malaysian consumers remain exposed to global economic risks including supply chain disruptions, trade tensions, and geopolitical conflicts that could impact purchasing power. Rising political risks associated with inflation and debt servicing costs could complicate policymaking and further strain the consumer sector, analysts warned. Global supply chain disruptions due to conflicts and longer shipping routes are leading to higher prices and product availability issues that force consumers toward more expensive alternatives. Trade barriers and retaliatory measures, particularly involving China, Europe, and the US, are expected to inflate costs and strain supply chains further. A potential deep recession in the US could spread to other economies and significantly impact global consumer markets, including Malaysia, BMI cautioned. Despite these challenges, the firm maintained its forecast for consumer spending growth of 3.8 per cent in 2025 and 5.0 per cent in 2026, supported by wage gains and monetary easing.
