Category: Economy

Shares of Indian real estate companies rose on Saturday after the government announced tax cuts to boost middle-class spending in Asia’s third-largest economy. The move is intended to increase investments in residential housing, benefiting homebuyers and developers.

Investors and economists are optimistic about the government’s proposal to decrease income tax rates in the 2025-26 budget. Experts anticipate the cutbacks will enhance disposable income and improve consumer demand, alleviating concerns about slow consumption in previous quarters.

Following the announcement, the Nifty Realty Index rose 3.3%, its highest single-day increase in nearly eight months. Most companies in the sub-index rose, with important real estate players including Prestige Estates, DLF, and Sobha jumping 2% to 6%.

According to an expert, the tax drop will increase demand for affordable housing. Middle-class homebuyers, landlords, and investors stand to profit from lower tax bills and greater affordability.

In a significant move, the government now allows homeowners to claim tax breaks on two self-occupied residences rather than just one. This change is projected to reduce tax burdens, promote homeownership, and increase real estate investment, particularly in second homes and Tier 2 and 3 cities.

The Union Finance Minister’s Budget 2025 speech on February 1 included a major tax overhaul with the new Income Tax Bill. The most notable reform is the entire exemption from income tax for earnings up to ₹12 lakh. Income tax rates have been altered, with the highest rate only applied to people earning more than ₹30 lakh yearly. These reforms are projected to dramatically reduce the tax burden for middle-class people.

Another critical step is to rationalise the tax deduction and collection rates and thresholds. The TDS exemption threshold for mutual funds is now ₹10,000, up from ₹5,000. Senior citizens would also benefit from the raised TDS threshold on interest income from bank savings.

Indirect tax reforms have streamlined tariff structures by eliminating seven tariff rates and leaving only eight. This is expected to increase compliance and revenue. The Budget also emphasises the government’s commitment to clean energy, with the establishment of the Nuclear Energy Mission, which aims to generate 100 GW of nuclear power by 2047.

On the fiscal front, the revised fiscal deficit for FY25 is expected to be 4.8%, followed by 4.4% in FY26.

According to official data released on Friday, India’s core infrastructure output increased by 4% in December 2024, slowing from the 5.1% rise registered in the same month the previous year. The drop in growth momentum was also noticeable monthly. In November 2024, the expansion was 4.4%, indicating a minor decline in December.

Natural gas production was one of the eight important infrastructure industries that had negative growth, adding to the overall slowdown. Coal, refinery products, fertiliser, and steel output growth have all slowed. Coal output increased by 5.3%, a decrease from 10.8% in December 2023. Similarly, refinery products, fertilisers, and steel saw growth rates of 2.8%, 1.7%, and 5.1%, respectively, compared to 4.1%, 5.9%, and 8.3% the previous year.

However, certain sectors demonstrated resiliency. In December, cement production increased by 4%, and electricity output increased by 5.1%.

Core sector growth in the current fiscal year was 4.2% from April to December, which was much lower than the 8.3% expansion registered during the same time previous year. The eight core industries account for 40.27% of the IIP, a major indication of overall industrial growth in the country.

India’s key stock indexes closed higher on Thursday, boosted by robust gains in state-owned enterprises and anticipation of more government expenditure in the impending Union Budget. The optimism in public-sector stocks outweighed falls in IT stocks and Tata Motors.

The Nifty 50 rose 0.37% to 23,249.5, while the BSE Sensex advanced 0.3% to 76,759.81. Despite the current rebound, the Nifty is still 11.5% down from its record high on September 27.

Analysts believe the latest rally is underpinned by “attractive valuations” in large-cap companies after a market correction, making them a safer long-term investment, according to Gaurav Bhandari, CEO of Monarch Networth Capital.

Nine of the thirteen major sectors finished the session in positive territory. State-owned firms expanded by roughly 2%, boosted by anticipation of increasing public sector investment in infrastructure. Reliance Industries, the second-heaviest stock on the index, rose 1.4%.

Meanwhile, IT stocks fell 1.1% after rising 2.6% in the previous session. Tata Motors fell 7.4% after reporting lower-than-expected quarterly profits, while Adani Enterprises fell 3% due to a steep profit reduction in its coal trading section.

However, Bajaj Finance climbed 2.1% due to strong loan growth.

Portugal’s economy expanded faster than predicted in 2024, with a 1.5% increase in the fourth quarter, bringing the annual growth rate to 1.9%, exceeding the government’s 1.8% prediction, according to official figures issued on Thursday.

The National Statistics Institute (INE) revealed that the country’s GDP increased by 2.7% in the fourth quarter compared to the same time in 2023. This represented a substantial improvement above the prior quarter’s revised 0.3% growth rate.

INE attributed the acceleration to an increase in private consumption, aided by tax cuts, growing earnings, and higher pensions. Private spending, which has usually accounted for two-thirds of GDP, has played an important role in fuelling economic growth.

Despite robust domestic demand, exports of goods and services, notably Portugal’s thriving tourism sector, had a negative impact since rising imports outpaced export growth.

Economic expert Filipe Garcia stated that employment climbed by 1.5% in 2024, with the overall workforce expanding by an astonishing 25% since 2013. He also stated that immigration remains an important aspect of Portugal’s economic performance, warning that recent government curbs on immigrants must be carefully considered.

The government anticipates economic growth to accelerate to 2.1% by 2025.

India has approved a finance package worth 163 billion rupees ($1.88 billion) to boost its key mining sector. The information minister made the statement on Wednesday. This approach is consistent with India’s aim to obtain important raw resources, particularly lithium, which is critical for energy transition technologies.

According to reports, the federal Ministry of Mines had allocated this amount. The government also expects the public sector to invest an additional 180 billion rupees in vital mineral development projects.

According to an official release, the mission’s goal is to accelerate the exploration of vital minerals on land and offshore. In addition, cash incentives will be offered to stimulate mineral prospecting.

The financing supports India’s efforts to lessen reliance on imported minerals. Currently, the country is significantly reliant on external sources, particularly for lithium, a critical component in battery technology. While China dominates lithium processing, India is seeking to build its own capacity.

To do this, New Delhi has contacted countries such as Australia, Russia, and the United States for technical assistance in lithium processing.

In 2023, India designated 30 minerals, including lithium, as “critical” to help its energy transformation and industrial growth, lowering its dependency on imports.

The United Arab Emirates (UAE) has announced an ambitious high-speed train project to connect Abu Dhabi and Dubai. This ground-breaking effort reinforces the UAE’s status as a leader in innovative transport systems. The cutting-edge rail network is expected to alter regional mobility, setting new standards for efficiency and speed.

The train will go over 100 kilometres in 30 minutes, reaching speeds of up to 350 km/h. Passing through major vital regions and tourist hotspots, the project promises to provide travellers with an unforgettable travel experience.

Beyond convenience, high-speed rail is a game changer for the UAE economy. It is expected to add AED 145 billion to the country’s GDP over the next 50 years, bolstering sectors such as logistics and tourism.

According to the Dubai government, important milestones, such as tender issuing and network design clearances, have already been met, setting the path for efficient project implementation.

The train would provide seamless connectivity between the two emirates, enhancing the quality of life for both inhabitants and visitors. The project increases socioeconomic links while aligning with sustainable development goals by accelerating business growth and opening up new investment opportunities.

Qatar plans to propose three new laws as part of a complete overhaul of its legal structure, with the goal of attracting more international investment to the Gulf state. Qatar’s newly appointed minister of commerce and economy, Sheikh Faisal bin Thani, acknowledged the proposal in an interview. The new legislation contains a bankruptcy law, a public-private partnership (PPP) law, and a commercial registration law, all of which are intended to streamline company operations and create a more investor-friendly climate.

Sheikh Faisal emphasised that Qatar is revising 27 legislation from 17 government ministries, affecting almost 500 activities. He anticipates the revised bankruptcy and PPP rules to be finalised by March, providing additional clarity and support to investors.

Qatar, one of the world’s largest liquefied natural gas exporters, has set an ambitious aim of obtaining $100 billion in foreign direct investment (FDI) by 2030, as specified in its national development policy. However, the country has lagged behind regional competitors like as Saudi Arabia and the UAE, which have had higher FDI inflows in recent years.

Despite giving advantages such as tax breaks, free zone facilities, and long-term residency plans, Qatar’s investment inflows fell in 2023, indicating the need for quick regulatory reforms to catch up with its neighbours.

According to government sources, India intends to increase its agriculture budget by more than 15%, to almost $20 billion, in the fiscal year 2025-26. This is the greatest rise in six years, and it aims to raise rural earnings while keeping inflation under control.

The increased money will go towards producing high-yielding seed varieties, boosting storage infrastructure, and increasing the output of pulses, oilseeds, vegetables, and dairy products. The finance and agriculture ministries have yet to comment on the situation.

India, the world’s second-largest producer of rice, wheat, and sugar, continues to experience high food prices. While inflation in October 2024 exceeded 10% year on year, it has averaged more than 6% for the previous decade.

The 2019 budget would increase total allocations to agriculture and related industries to 1.75 trillion rupees, up from 1.52 trillion rupees this year. A share will also go towards research and development, which now receives 99.41 billion rupees.

Finance Minister Nirmala Sitharaman is scheduled to introduce the budget on February 1. The government also intends to increase pulse production to 30 million metric tonnes by 2030, enhance crop insurance, and provide subsidies to food processors.

Kenya’s National Bureau of Statistics (KNBS) will start providing core inflation data to improve the efficiency of monetary policy choices. Previously, KNBS concentrated on headline inflation, which includes volatile components such as food and petrol. This caused the Central Bank of Kenya (CBK) to compute non-food and non-fuel inflation separately in order to have a better understanding of underlying inflation patterns.

Core inflation, which removes volatile elements like food and energy prices, is a more reliable indicator of long-term inflationary pressures. KNBS emphasised the need of having an official and comprehensive core inflation indicator in line with worldwide central banking norms. Policymakers argue that maintaining price stability is difficult when headline inflation is caused by supply-side variables such as bad weather, which monetary tools cannot influence.

The change is designed to improve economic forecasts, assist the CBK in making appropriate interest rate decisions, and address disparities in inflation data between the KNBS and the central bank.

This move intends to promote transparency, maintain economic stability, and foster informed public communication about inflation, ultimately bringing Kenya’s inflation reporting in line with international standards.