2024-11-29 11:44

BEIJING, Nov 29 (Reuters) - China has finished a 46-year campaign to encircle its largest desert with trees, part of national efforts to end desertification and curb the sandstorms that plague parts of the country during the spring, state media reported on Friday. A "green belt" of about 3,000 km (2,000 miles) around the Taklamakan was completed on Thursday in the northwestern region of Xinjiang, after workers planted the final 100 metres of trees on the desert's southern edge, the Communist Party-run People's Daily said. Efforts to enclose the desert with trees began in 1978 with the launch of China's "Three-North Shelterbelt" project, colloquially known as the Great Green Wall. More than 30 million hectares (116,000 square miles) of trees have been planted. Tree planting in the arid northwest has helped bring China's total forest coverage above 25% by the end of last year, up from around 10% in 1949. Forest coverage in Xinjiang alone has risen from 1% to 5% in the last 40 years, the People's Daily said. The shelterbelt project has involved decades of experimentation with different tree and plant species to determine which is the hardiest. Critics say that survival rates have often been low, and it has been ineffective in reducing sandstorms, which routinely reach the capital Beijing. China will continue planting vegetation and trees along the edge of the Taklamakan to ensure desertification is kept in check, Zhu Lidong, a Xinjiang forestry official, told a press briefing in Beijing on Monday. He said poplar forests on the northern edge of the desert would be restored through the diversion of flood waters, and officials were also planning new forest networks to protect farmland and orchards on the western edge. Despite China's tree planting efforts, 26.8% of its total land is still classified as "desertified", according to official data from the forestry bureau, down slightly from 27.2% a decade ago. Sign up here. https://www.reuters.com/world/china/china-completes-3000-km-green-belt-around-its-biggest-desert-state-media-says-2024-11-29/

2024-11-29 11:44

BENGALURU, Nov 29 (Reuters) - India's economy slowed much more than expected in July-September, expanding by only 5.4% year-on-year, data showed on Friday, weighed down by weak urban consumption following a rise in food prices. A Reuters poll had predicted a 6.5% expansion in gross domestic product for the quarter ending Sept. 30. COMMENTARY MADHAVI ARORA, LEAD ECONOMIST, EMKAY GLOBAL, MUMBAI Needless to say, the fall in income capacity of the urban sector has hit their consumption profile, albeit with a lag. The last 3-6 months have seen a pronounced fall in urban consumption demand across durables and non-durable items, as also seen in various consumption-based companies' results and commentaries. Public sector has been a missing agent in India's growth profile for the first five months of this fiscal year. However, sharp pick-up in public spending since September should increase the contribution of public sector spending in GDP growth ahead in H2 FY25. HARRY CHAMBERS, ASSISTANT ECONOMIST, CAPITAL ECONOMICS We expect growth to remain subdued over the next few quarters as household consumption moderates and investment growth eases in an environment of still-high interest rates. But the economy is not going to crater. In terms of the policy implications, we don't think the (Sept quarter) data will convince the RBI to lower interest rates at its December meeting given that headline inflation has surged over the past few months. But if we are right in thinking that inflation has now peaked and will gradually retreat towards the 4% target, that should open the door for policy easing to begin in April. KUNAL KUNDU, INDIA ECONOMIST, SOCIETE GENERALE, BENGALURU The slowdown in India's economic activity is eventually getting reflected in the GDP data despite clear evidence of it in various high frequency data led by persistently weakening domestic consumption. That said, rising deflator is equally responsible markedly slower growth now, unlike last year when the real GDP growth was artificially propped up by unusually low deflator. RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE The outcome reflects a miss in domestic-oriented as well as external-driven segments. This quarter likely marks the bottom of the cycle and we count on a modest recovery in the second half as few of these constraints are expected to even out. Nonetheless, a reassessment of full-year growth numbers is likely, backed by the case for stepped up monetary as well as fiscal policy support. ADITI NAYAR, ECONOMIST AT ICRA, GURUGRAM In light of the recent spike in CPI inflation, we anticipate a status quo from the RBI's monetary policy meeting next week. However, with the GDP growth sharply undershooting the Committee's expectations, a February 2025 rate cut may be on the table if the next two inflation prints recede. GAURA SEN GUPTA, INDIA ECONOMIST AT IDFC FIRST BANK, MUMBAI This (GDP print) reflects a sharp slowdown in listed company profits in the second quarter. From the expenditure side, capex growth slowed, reflecting a slowdown in government capex especially state government. Private capex has remained muted due to lack of visibility on consumption demand. Private consumption growth slowdown is led by urban demand weakness as income growth slowed. Post today's print, there is a high probability of an RBI rate cut in December. VIVEK KUMAR, ECONOMIST, QUANTECO RESEARCH, MUMBAI Some of the downdraft will fade away in H2 FY25 as the favourable impact of healthy kharif sowing comes on board, while the government steps up its expenditure in an attempt to get close to the budgeted target. This, along with the festive season revival in activity levels, should help in GDP growth turning higher. Having said that, global uncertainty is likely to worsen in the Trump 2.0 regime, the cascading effect of which needs to be monitored closely. Overall, we now see a credible downside risk to our FY25 GDP growth estimate of 7.0%. UPASNA BHARDWAJ, CHIEF ECONOMIST KOTAK MAHINDRA BANK, MUMBAI The sharply lower-than-expected GDP figures reflect the highly disappointing corporate earnings data. The manufacturing sector appears to have taken the maximum beating. The high-frequency data suggests festive-linked revival in activity may provide a marginally better second-half growth but overall GDP growth for the full year is going to be around 100bps lower than RBI's estimate of 7.2%. Despite the sharp slowdown in GDP growth, we maintain our view of a pause by the RBI next week, given elevated inflation and uncertain global environment. SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM The softer economic growth stemmed from lower manufacturing, electricity and mining growth in the second quarter. On the demand side, consumption growth slowed probably due to a moderation in urban demand. While we expect the RBI to keep the policy rate unchanged at its meeting next week, the possibility of a move in February for a rate cut has increased. GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI Amid sluggish consumption growth owing to moderating real income growth and effect of concentrated and heavy rains, demand drivers remained weak in Q2 FY25. The rise in commodity prices amid sluggish top-line growth led to drop in gross value added growth in manufacturing sector. Both these factors impacted the growth in Q2FY25. Sign up here. https://www.reuters.com/world/india/view-india-economy-grows-54-july-sept-quarter-2024-11-29/

2024-11-29 11:35

July-Sept GDP growth 5.4% y/y vs 6.5% in Reuters poll Manufacturing grows 2.2% y/y vs 7% rise in April-June Economists say economic growth dragged down by slower consumption NEW DELHI, Nov 29 (Reuters) - India's economy slowed much more than expected in July-September, hampered by weaker expansions in manufacturing and consumption, which will add pressure on the central bank to cut interest rates. Gross domestic output (INGDPQ=ECI) , opens new tab in the world's fifth biggest economy rose by 5.4% in July-September year-on-year, data showed on Friday, the slowest pace in seven quarters and well below a Reuters poll of 6.5%. In the previous quarter it grew 6.7%. The gross value added (GVA), a more stable measure of economic activity, saw a modest 5.6% growth, easing from a 6.8% increase in the previous quarter. Economists said private consumption, accounting for 60% of GDP, and manufacturing has been hit by slower urban spending due to rising food inflation, high borrowing costs and weak real wage growth, despite a recovery in rural demand. BROAD-BASED SLOWDOWN A slowdown was visible across a number of sectors but was most pronounced in manufacturing, where growth slowed to 2.2% year-on-year in July-September, versus 7% growth in the previous quarter. "The manufacturing sector appears to have taken the maximum beating," said Upasna Bhardwaj, economist at Kotak Mahindra Bank, estimating that full-year economic growth could be around 6.2%. Economists say inflation, now running at around 6%, is biting into demand for goods ranging from soaps to shampoos to cars, particularly in urban areas. Private consumer spending rose 6.0% in July-September from a year earlier, compared to a 7.4% increase in the previous quarter. Agricultural output rose 3.5% in July-September from a year earlier due to a good monsoon, up from 2% growth in the previous quarter. India remains among the fastest growing major economies with government officials forecasting a potential regaining of momentum in the second half of the fiscal year, helped by improved rural demand after a strong monsoon and a pick-up in government spending. Still, economists warned that full-year economic growth could be much lower than the central bank's estimate of 7.2%. Bond yields and overnight index swap rates, seen as an indicator of interest rates, fell after the release of the GDP data, signalling an increased probability of an interest rate cut in February. The Reserve Bank of India (RBI) has not cut rates since May 2020. A few economists said the central bank may even consider a rate cut in December. "Post-today's (GDP) print, there is a high probability of an RBI rate cut in December," said Gaura Sen Gupta, economist at Mumbai-based IDFC First Bank. Indian government spending in real terms rose 4.4% year-on-year in July-September, compared to a 0.2% contraction in the previous quarter, data showed. India's finance and trade ministers have called for lower interest rates to help industries to ramp up investments and build capacity. The RBI's Monetary Policy Committee left its benchmark repo rate (INREPO=ECI) , opens new tab unchanged at 6.50% last month due to still high inflation, while tweaking its policy stance to "neutral". The MPC will announce next policy decision on Dec. 6. Sign up here. https://www.reuters.com/world/india/india-economy-grows-54-yy-july-sept-2024-11-29/

2024-11-29 11:33

LONDON, Nov 29 (Reuters) - Britain has called for views on changes to its emissions trading system (ETS) that could see the shipping sector join its carbon market from 2026. Britain's ETS is part of its wider efforts to meet climate targets and was launched in 2021 to replace its participation in the European Union's ETS after it left the bloc. The scheme currently covers power plants, factories and airlines representing around a third of Britain's emissions. Under the ETS, the government sets a gradually decreasing cap on the amount of emissions that a sector, or group of sectors, can produce. It creates carbon permits for those emissions and companies must buy one for each tonne of carbon dioxide (CO2) they emit. “Expanding the scheme to include the maritime sector… will ensure that the price of fuels used by the sector better reflects their environmental impacts,” the UK Emissions Trading Scheme Authority said in a statement late on Thursday. Benchmark UK carbon permits currently trade around 36.60 pounds ($46.44) per metric ton of CO2. The move would follow Europe, which began phasing the shipping industry into its ETS from the beginning of 2024. The consultation, which is open to everybody, is open until the end of Jan. 23, 2025. ($1 = 0.7881 pounds) Sign up here. https://www.reuters.com/markets/carbon/britain-seeks-views-including-shipping-carbon-market-2026-2024-11-29/

2024-11-29 11:32

TSX ends up 0.4% at 25,648.00 Posts largest monthly gain in one year Canada's economy grows 1% in third quarter Technology sector rises 1% Nov 29 (Reuters) - Canada's main stock index extended its November gains on Friday, moving to a new record high, with technology and industrial shares rising as investors welcomed greater clarity about the economic outlook following the outcome of the U.S. election. The S&P/TSX composite index (.GSPTSE) , opens new tab ended up 104.48 points, or 0.4%, at 25,648.00, eclipsing the record closing high it posted on Thursday. For the month, it was up 6.2%, its fifth straight monthly gain and the largest since November last year. "We've climbed that wall of worry," said Greg Taylor, portfolio manager at Purpose Investments. "There was a lot of nervousness heading into the (U.S.) election and now we've got at least more clarity with what's going on. We've got more confidence that there's going to be some more growth aspects in the U.S. and that should help earnings as the economy keeps going and regulation falls back." U.S. President-elect Donald Trump has pledged to cut taxes and loosen business regulations. While those measures could boost the economy, the potential for higher fiscal deficits under the Trump administration, as well as inflationary tariff and immigration policies, could reduce prospects for Federal Reserve interest rate cuts and raise long-term borrowing costs, say analysts. "The big thing everyone is going to be watching is just what happens with (bond) yields and the (U.S.) dollar going forward, because if yields and the dollar keep going higher that's going to be a pretty big headwind," Taylor said. The Canadian dollar posted its third straight monthly decline against its U.S. counterpart in November as Canada's economy grew just 1% in the third quarter, prompting investors to raise bets on another outsized interest rate cut from the Bank of Canada. The technology sector added 1% on Friday and industrials were up 0.5%. Seven of 10 major sectors ended higher. Sign up here. https://www.reuters.com/markets/tsx-futures-edge-higher-ahead-gdp-data-2024-11-29/

2024-11-29 11:28

LONDON, Nov 29 (Reuters) - The pound held steady on Friday, leaving it on track for its biggest weekly rise since mid-September after the dollar gave up some of its post-election gains. Sterling was last at $1.269 after rising to a two-week high of $1.275 in early trading, and was set for a weekly gain of 1.2%. The euro flat versus the pound at 83.21 pence, within the range the currency pair has traded in since mid-September. The dollar dropped as bond yields fell on Monday after President-elect Donald Trump picked hedge fund manager Scott Bessent as Treasury secretary, which reassured some investors that his more radical and inflationary policies may be tempered. Analysts had a harder time explaining the dollar's further drop on Wednesday although they said investors were likely rebalancing their portfolios before the end of the month, taking profit on U.S. stocks, bonds and the dollar after the post-election rally. There has been little on the British side driving sterling this week. Market expectations for further Bank of England rate cuts by the end of next year have stayed at around 75 basis points. Sterling has held up better than almost all other developed economy currencies this year bar the dollar, as economic growth has ticked along and wage and services inflation has remained strong, limiting the scope for BoE cuts. Data on Friday showed British lenders approved the most mortgages for house purchase since August 2022 last month, although consumer credit growth slowed slightly to its weakest in nearly two years. The BoE warned in a report that higher trade barriers could hit global growth and feed uncertainty about inflation, potentially causing volatility in financial markets. Sign up here. https://www.reuters.com/markets/currencies/pound-set-best-week-since-september-dollar-stumbles-2024-11-29/