VDMA forecasts Indian GDP growth in FY 17-18 at 7.2%

VDMA forecasts Indian GDP growth in FY 17-18 at 7.2%

According to the VDMA, which is active in India with support to more than a 100 major German company investments in the country, India’s economy may grow at a slightly slower pace of 7.2% this fiscal year (1 April 2017 to 31 March 2018) amid weaker global demand and risk aversion. VDMA also refers to ‘methodological concerns’ in computation of official GDP data. According to the global financial services majors, some of the factors that are weighing on the economy include weaker global demand, banking sector risk aversion, sluggish domestic private investment, gradually climbing oil prices, and statistical auto-correction in growth data.

All considered, VDMA expects GDP growth to slow gently from 7.6% last year to 7.4% in 2016-17 and further to 7.2% in 2017-18. Despite lower growth, this will be among the best growth performances globally. India’s first quarter GDP growth was 7.9% y-o-y, primarily led by urban consumption demand.

VDMA says the Indian GDP data are fraught with methodological concerns and when it made some adjustments in method, the actual growth was 6 to 6.5%, 150 bps below the official estimate. It is further noted that some of the growth overestimation—around 80 bps—could auto-correct over the next six quarters.

Meanwhile, the factors that are likely to support GDP numbers, going forward, include government wage hike-led urban consumption demand, normal monsoon-driven rural revival and monetary transmission of previous policy rate cuts powered by domestic liquidity.

Germany engineering goods and Brexit
The machine manufacturers in Germany fear negative consequences from withdrawal of Britain from the EU. As per the VDMA, this would worsen the investment climate in Europe as the trade to the UK would be noticeably more difficult for machinery. In the first quarter of this year, exports of machinery from Germany have declined to the United Kingdom by 4% to around €1.7 billion compared to last year. With an export volume of €7.2 billion per year (2015), the UK is the fourth most important market for engineering.

For general engineering, UK is one of the core markets. A withdrawal from the EU would be a great loss for the engineering industry. This would in fact hinder bilateral trade between EU and Britain.

The German engineering industry is particularly dependent on exports, which achieved 77% of its sales abroad (2015). Great Britain is one of the main export markets ranking behind the United States (€16.8 billion), China (€16 billion), France (€9.8 billion) and ahead of Italy (€6.5 billion) and the Netherlands (€1 billion). At the same time in 2015, Germany was the most important machine supplier for the UK ahead of the US and well ahead of China.

– Naresh Khanna, editor@ippgroup.in

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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