Thursday, September 28, 2017
US growth revised up again; India's flagging economy raises concerns; UK young 'more anxious'
1 US growth revised up again (BBC) The US economy grew even faster in the second quarter than previously thought, new figures have indicated. The Commerce Department said it grew at a 3.1% annual rate over the three months to the end of June, up from a previous estimate of 3%, which was itself revised up from an initial 2.6%.
The further upward revision came as a surprise to analysts, who had it expected it to stay the same. Higher consumer spending, helped boost the figure, as did state expenditure. The US economy is now growing at the fastest rate in two years.
2 India’s flagging economy raises worries (San Francisco Chronicle) Three years after Prime Minister Narendra Modi came to power on a euphoric wave of promises to boost India's economy, add millions of jobs and bring "good times" to the developing nation. India's economic prospects look decidedly grimmer.
India's economic expansion has slowed to its lowest level in three years. Small businesses are struggling, or even shutting down, after overhauls of the nation's currency and sales tax system. Modi's own allies warn of a dire outlook, with some raising the specter of an economic depression.
While government ministers have urged patience, analysts and others in Modi's governing Bharatiya Janata Party are not so sanguine about the current trends. "A hard landing appears inevitable," Yashwant Sinha, a BJP lawmaker and former finance minister, said in a stinging commentary. He accused the government of rushing through poorly planned economic reforms, which he said will hobble home-grown businesses for years to come.
Another leading BJP lawmaker, Subramanian Swamy, said India was facing the possibility of a "major depression." Last week, the Organization for Economic Cooperation and Development scaled back its economic growth forecast for India to 6.7 percent for the 2018 fiscal year, down from 7.3 percent predicted earlier this year. Other organizations and banks have made similar downward revisions.
Economists have said the country needs to maintain 8 percent growth to add enough jobs for some 12 million young people joining the work force every year. The warnings have been sobering for Modi, who appointed a new Economic Advisory Council this week to offer him advice independent of the finance ministry. Economists said that may be too little, too late.
Economists are most alarmed by the slowdown in manufacturing and construction — two sectors many had assumed would do well under a business-friendly government. Instead, both have seen a sharp rise in unemployment.
3 UK young ‘more anxious’ (Phillip Inman in The Guardian) A third of young people feel more anxious now than this time last year, according to a study that found the prospect of Britain leaving the European Union, money worries and the cost of housing have magnified doubts about future prospects.
The rise in anxiety sits alongside figures showing that around half of young people are struggling to make ends meet, including 10% of young people who are facing dire financial problems as stagnating wages and rising inflation hit their incomes.
Coming only a week after senior MPs called for an independent review of the UK’s rising debt levels, the Young Women’s Trust said many of the 4,000 young people aged 16 to 30 it surveyed for its annual report, Worrying Times, battled to make it to the end of the month without borrowing money from friends, family or commercial lenders.
The report found that 41% of young women and 28% of young men said it was “a real struggle to make their cash last until the end of the month”, compared with 39% and 27% respectively in 2016.
The report’s authors said: “Our findings show young women are consistently more likely than young men to encounter money problems, workplace discrimination, health problems, worries about the future and low confidence. And women from the lowest socio-economic groups are faring worse still, with their situation also deteriorating in the last 12 months.”
The Young Women’s Trust said some measures of financial anxiety and wellbeing among the under-30s had recovered slightly since last year, when the poll registered a severe slump in financial confidence. But in July, when the poll was carried out, almost half of young people (47%) still said they were worried for the future.