financejunction Connect Q2, FY'15

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FROM THE VICE PRESIDENT’S DESK

Volume 6

Issue 6

Sept 2014

Greetings from mjunction! India’s lumbering economy registered its fastest growth in two-and-a-half years for the quarter ended June when the gross domestic product (GDP) grew at 5.7% compared with a provisional 4.6% expansion in the previous three months and a 4.7% growth in the first quarter of 2013-14. The last two years marked the longest spell of sub-5% growth in a quarter of a century. While inflation seems to be easing, IIP and PMI data still points to stagflationery trends. This poses a difficult challenge to RBI and how Rajan addresses this something the country is waiting to watch. It is important to mention that interest rate reduction at this juncture looks a bit of a challenge in spite of a dip in inflation. In this issue of financejunction Connect, we have summarised the first 100 days of the Modi government and the first year of Raghuram Rajan, the 23rd Governor of the Reserve Bank of India. This issue also highlights the global trends in the Supply Chain Finance and how financejunction offers world class supply chain solutions to its customers and clients across industries, thus making their supply chain robust. I hope you enjoy this issue as much as we enjoyed and learned from working on this. My team and I look forward to your feedback on how we can make financejunction Connect an even more interesting read for you. On behalf of mjunction, I would take this opportunity to wish you all a very happy and prosperous Dushera and Diwali. Regards,

PART 1 GLOBAL ECONOMY

Vinaya Varma, Vice President, mjunction services limited

GLOBAL ECONOMY Global economy recovery has been slow and irregular in the last few years. According to the International Monetary Fund (IMF) July World Economic Outlook, the world economy grew 3.5% in 2012, the pace decelerated to 3.2% in 2013 and growth is expected to be only modestly better in 2014 at 3.4% and 4% in 2015.

Global power is shifting from advanced to emerging market and developing economies. Advanced economies are projected to climb 1.8% in 2014 and 2.4% in 2015. Emerging economies are predicted to grow by 4.6% in 2014 and 5.2% in 2015. These growth projections are considered crucial for global expansion as well as for the progress of emerging and developing nations.

GDP GROWTH RATES 2013A

2014E

2015E

3.2 3.4

4 4 3.2

3.4

4 3.2 3.4

4 3.2 3.4

4

3.2 3.2 3.4

4 3.4

4

3.2 3.4 3.4

3.2

4 World Economy

U.S.

Japan

China

India

Brazil

South Africa

Euro Zone

*Source of Growth Rates: IMF’s July 2014 WEO

While the IMF pointed to Japan, Germany and the UK as the year's best performers, weakness in the US and China convinced it to lower its global outlook.

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