Textile sector has continuously maintained trade surplus with exports manifold higher than imports. In FY 2020-21 there was a deceleration in textile exports due to pandemic disrupting the supply chain and demand. However, signs of recovery are visible in 2021-22. During April-December, 2021 the total Textiles & Apparel including Handicrafts exports was US$ 29.8 billion as compared to US$ 21.2 billion for the same period last year. This implies robust growth of approximately 41% over last year. Growth signals an economic rebound. Even compared to pre-pandemic year i.e. 2019-20 export for textile sector (Textiles & Apparel including Handicrafts) increased by 14.6% from April- December 2021 as compared to April-December 2019. Textiles exhibited an increase in export of 31%, Cotton Yarn/ Fabrics/ Made-ups, Handloom products etc. exhibited an increase of 43% and Jute products exhibited an increase of 33% from April- December 2021 as compared to April-December, 2019. Government has set the target of $44 billion for Textiles & Apparel including Handicrafts and approximately 68% of annual target has already been achieved. The last quarter of FY always has higher activity than the earlier quarters. Hence industry is hopeful that targets will be duly met.
Source: PIB
The Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution today asked Industry Bodies to prepay MSMEs to safeguard their viability and to boost employment and growth. He was interacting with the leaders of major Industry bodies virtually from New Delhi today. Shri Piyush Goyal was speaking at a meeting with heads of top Business and Industry Associations of country today to seek their suggestions and inputs to ensure continuation of fast rebound of economic activities and high growth rates being achieved. He congratulated Indian Industry for bouncing back after taking a hit due to the pandemic and for the resilience displayed while grappling with the pandemic, especially in the field of exports. The Minister said that the growth in services exports, inspite of travel and tourism restrictions was truly commendable and said that we must aim to reach $ 250 billion services exports. He added that Indian professionals had demonstrated great success in working from home and therefore the nation had succeeded in meeting every single one of its international commitments, even during the pandemic, earning it the title of being a trusted partner to the world. Highlighting the progress made in FTA negotiations, Shri Goyal said that the Government was striving to conclude several Early Harvest Agreements so that their benefits could reach industry soon. He said that an FTA with UAE was nearing conclusion, negotiations were at an advanced stage with Australia and that discussions with Israel were ongoing. Referring to the relaunch of market access negotiations with Korea, Shri Goyal said that a comprehensive fast track dialogue had been initiated to address concerns arising out of the previous agreement. The Minister said that there was an imminent need for upgradation of testing facilities and labs to improve to quality and called upon Indian Industry to extend its support in this regard. He also asks the industry to lend guidance for transformational exports growth beyond $ 400 billion. Shri Goyal told industry leaders to be proactive in giving inputs to the government, especially in arenas like FTA negotiations. Industry should become more demanding, he added. He urged Industry to use Single Window for business processes and approvals to the maximum extent possible and asked them to give suggestions and inputs for further decriminalization of rules and reduction of compliance burdens wherever feasible. The Minister also asked industry to invest more and place greater emphasis upon Research and Development activities as a business and growth strategy. Underscoring Government’s commitment towards infrastructure development and capital expenditure, Shri Goyal said that the Centre would always support businesses activities. He also asked industry to use initiatives like the PM GatiShakti National Master Plan and India Industrial Land Bank to the best possible extent to expand and grow. The Minister observed that by and large economic, activities had not being impacted by the current Covid surge. Industry representatives present in the VC included Shri Chandrajit Banerjee, Director General, CII; Shri Subhrakant Panda, Senior Vice President & Shri Sanjiv Mehta, President, FICCI; Shri Vineet Agarwal, President & Shri Deepak Sood, Secretary General, ASSOCHAM; Shri Pradeep Multani, President & Shri Saurabh Sanyal, Secretary General, PHDCCI; Shri Pradeep Sureka, President & Dr Rajeev Singh, Director General, Indian Chamber of Commerce; Shri Juzar Khorakiwala, President & Shri Ajit Mangrulkar, Director General, Indian Merchant Chamber; Shri Gopi Koteeswaran, of the Southern India Chamber of Commerce & Industry; Shri Lalit Beriwala, Senior Vice President, Merchants’ Chamber of Commerce and Industry; Shri Vijay Kalantri, President, All India Association of Industries; Shri Rasesh Doshi, Vice President, Federation of Associations of Maharashtra; Shri Praveen Khandelwal, Secretary General, Confederation of All India Traders (CAIT); Shri Rakesh Chhabra, Vice President & Shri Anil Bhardwaj, Secretary General, Federation of Indian Micro and Small & Medium Enterprises; Shri Baldevbhai Prajapati, All India President, Laghu Udyog Bharati; Shri Ashish Aggarwal, Vice President & Head of Public Policy, NASSCOM; Shri Ravi Raghavan, President, Indian Machine Tool Manufacturers' Association; Shri Vinod Aggarwal, Vice President & Shri Rajesh Menon, Director General, Society of Indian Automobile Manufacturers (SIAM); Shri Sunjay J. Kapur, President, Auto Component Manufacturer Association (ACMA); Shri Vipul Ray, President, Indian Electrical and Electronics Manufacturers Association (IEEMA) and Dr Viranchi Shah, National President, Indian Drug Manufactures' Association.
Source: PIB
Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, Shri Piyush Goyal today called upon the Startups to help microentrepreneurs in rural areas, leverage technology to grow their businesses and encourage farmers, weavers & artisans etc. to use digital platforms to sell products. “Startups will help India transition from an Assembly Economy, particularly in the digital world, to a knowledge-based economy. In this digital age, technology has removed boundaries & barriers and got the limitations of our enterprises out of our minds,” he said, addressing the 16th India Digital Summit, 2022 through video conference. Pointing out that during the last year India emerged as the world’s favourite Startup destination, Shri Goyal said our Startups are the agents of change as well as the pillars for making India Aatmanirbhar. “It’s been 6 years of the Startup India Mission. In six years we have already produced 82 Unicorns, the world’s 3rd largest no. of Unicorns with over 60,000 Startups registered at DPIIT and with the growing recognition of our skilled people across the world with investors queuing up from around the world to come and participate in this revolution that we are seeing in this Startup ecosystem,” said Shri Goyal, adding, “from 2018-21, in barely three years more than 6 Lakh Jobs were created by our Startups, in fact, in the last year alone, more than 2L jobs were created.” Noting that the Government is only acting as a facilitator, Shri Goyal said we are currently focusing on the 3 Es - Ease of living, Ease of Service & Ease of Skilling, re-skilling & upskilling. The Minister unveiled ‘LEAP’ as the way forward for Startups, - “Leverage, Encourage, Access & Promote”. There is always room for improvement & with Sabka Prayas we can strengthen our Startup ecosystem further, he added. Shri Goyal said the Prime Minister’s interaction with the Startups on 15th January will supercharge the courage of our innovators. “The First-Ever Startup India Innovation week is going on as part of the Azadi ka Amrit Mahotsav this week, exhibiting our Startups to the world and multiple pitching sessions to increase international engagements. With this whole-of-Government approach, the event has been organized in collaboration with 30 Departments of the Government of India, and has had over 100,000 participants who have registered in this event,” he said. Congratulating the Internet And Mobile Association of India (IAMAI) for arranging yet another successful edition of the Digital Summit, the Minister noted with satisfaction that the India Digital Summit, in its 16th edition, is the oldest event of the digital industry in India.
Source: PIB
The UK government on Thursday announced the launch of free trade agreement (FTA) negotiations with India, describing it as a "golden opportunity" to put British businesses at the "front of the queue" of the Indian economy. British Prime Minister Boris Johnson said an FTA would take the country's historic partnership with India to the next level, and highlighted Scotch whisky, financial services and cutting-edge renewable technology among some of the key sectors set to benefit. The first round of negotiations is expected to start next week, which the British government said would make it the UK's quickest start of formal talks between negotiating teams following a launch. "A trade deal with India's booming economy offers huge benefits for British businesses, workers and consumers. As we take our historic partnership with India to the next level, the UK's independent trade policy is creating jobs, increasing wages and driving innovation across the country," Johnson said. "The UK has world-class businesses and expertise we can rightly be proud of, from Scotch whisky distillers to financial services and cutting-edge renewable technology. We are seizing the opportunities offered in growing economies of the Indo-Pacific to cement our place on the global stage and deliver jobs and growth at home," he said. Johnson's statement came as his Secretary of State for International Trade, Anne-Marie Trevelyan, prepared to meet with Union Commerce and Industry Minister Piyush Goyal in New Delhi for the 15th UK-India Joint Economic and Trade Committee (JETCO) to review the progress within the UK-India Enhanced Trade Partnership agreed to last May by Prime Minister Narendra Modi and Johnson. "A deal with India is a golden opportunity to put UK businesses at the front of the queue as the Indian economy continues to grow rapidly," Trevelyan said. "By 2050, India will be the world's third-largest economy with a middle class of almost 250 million shoppers. We want to unlock this huge new market for our great British producers and manufacturers across numerous industries from food and drinks to services and automotive," she said. "As an independent, deal-making nation, the UK is broadening our economic horizons and forging stronger partnerships with the fastest-growing economies of the world. India marks the start of our ambitious five-star year of UK trade and will show how the deals we negotiate will boost the economies across all nations and help level up all regions of the UK," said the minister who is scheduled for bilateral talks with senior Indian Cabinet ministers before she concludes her two-day visit to the country on Thursday. An India-UK FTA is billed in the UK as creating huge benefits for both countries, with the potential to boost bilateral trade by up to GBP 28 billion a year by 2035 and increase wages by up to GBP 3 billion across the UK. A deal with India is also pegged as a "big step forward" in the UK's post-Brexit strategy to refocus trade on the Indo-Pacific, home to half of the world's population and 50 per cent of global economic growth. The Department for International Trade (DIT) has said the UK wants an agreement that slashes barriers to doing business and trading with India's GBP 2 trillion economy and market of 1.4 billion consumers, including cutting tariffs on exports of British-made cars and Scotch whisky. "We are delighted to see FTA negotiations launch between the UK and India. With India, a rapidly advancing global economic superpower, this trade deal can unlock a new era of partnership and pave the way for significant trade and investment opportunities for UK and Indian businesses," said Lord Karan Bilimoria, president of the Confederation of British Industry. "To fully realise the growth possibilities, the UK must focus on the areas which will drive our future economic success, such as collaborative innovation and stronger regulatory alignment. Above all, trade is a key instrument for economic growth and prosperity across all regions and nations," he added. According to DIT estimates, removing duties alone would increase UK exports to India by up to GBP 6.8 billion, with Scotch whisky and cars currently facing enormous duties of 150 per cent and 125 per cent respectively. "Key to any future trading relationship will be the progressive removal of tariffs, enhanced trade facilitation and reducing other barriers to trade, which can be highly complex and burdensome," said Mike Hawes, chief executive of the UK's Society of Motor Manufacturers and Traders.
DIT analysis claims a trade agreement with India would benefit all parts of the United Kingdom, given that already around 30,000 people in the West Midlands were employed via Indian investment in 2019. The northern region of England could see a massive boost of up to GBP 300 million with opportunities for manufacturers of motor vehicles and parts. The Indian government's plans to install 175 GW of renewable energy capacity by 2022 are also seen as a major opportunity for the UK's renewables industry, which hopes to benefit from a deal that slashes barriers such as import tariffs as high as 15 per cent on wind turbine parts. The UK is pitching the India FTA as a major move since its exit from the European Union (EU), in support of free and fair trade in the Indo-Pacific. The launch of similar negotiations with Canada, Mexico and the Gulf are in the pipeline, besides membership of the GBP 8.4 trillion Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade bloc.
Source: Business Standard
Seeks correction of huge bilateral trade imbalance in favour of South Korea India has asked South Korea to do away with non-tariff barriers (NTBs), such as mandatory local certification, bio-equivalence tests and other export hurdles, for at least six items, including textiles, mangoes, steel, engineering goods, pharmaceuticals and rice, to improve market access for Indian businesses and bridge the wide trade deficit. The matter was taken up at a bilateral meeting headed by Commerce & Industry Minister Piyush Goyal and his Korean counterpart Yeo Han-koo in New Delhi on Tuesday, according to a source close to the development. Fast-tracking negotiations The two Ministers also agreed to fast-track negotiations on the up-gradation of the bilateral Comprehensive Economic Partnership Agreement (CEPA) which, India believes, has delivered disproportionately more benefits to the South Koreans. The CEPA was implemented in 2010. “India made it clear to South Korea that while it appreciated the strengthening of trade and investment ties with the country, the large trade deficit, at over $ 8 billion in 2020-21, had to be checked and that would be partly possible by removal of identified non-tariff barriers,” the source said. NTBs have been identified in the textile sector in the form of mandatory use of the Korean Certification mark (KC mark) for all textile items sold in the country indicating compliance with mandatory requirements. Under acts for safety management of children’s products, products must be mandatorily tested and inspected by local authorised Korean testing institutions. “The difficulty being faced by Indian exporters to go for local testing and certification has been taken up under the joint working group on standards under the CEPA up-gradation negotiations,” the source said. Mandatory need for local testing and certification is also making exports difficult for Indian engineering goods as it is a time consuming and expensive process. India is discussing a Mutual Recognition Agreement with Korea in the area to sort out the problem, the source pointed out. India’s pharmaceutical producers, too, are facing NTBs in Korea as the country insists on conducting bio equivalence studies in their country for drug registration. India has said that it is time consuming, expensive and completely unnecessary as it has world class bio equivalence study centres, which are accepted by stringent regulatory authorities like USFDA and Health Canada. Exporters of agricultural products are facing their own set of issues. While pre-inspection requirement for mangoes insisted on by Korea, if not exempted permanently, could affect growth potential of Indian exports of the fruit, the tariff rate quotas in rice offered by Korea to China, Vietnam, Thailand, Australia and the US, was leaving very little export opportunity for India. “All these NTBs have to be satisfactorily resolved if Indian exports are to increase. Otherwise, the CEPA will be of not much use to India,” the source said. Trade imbalance South Korea’s exports to India increased from $8.57 billion in 2009-10, a year before the implementation of the CEPA, to $15.65 billion in 2019-20 (the pre-pandemic year). Shipments declined to $12.77 billion in 2020-21 due to the pandemic related overall slowdown.Increase in India’s exports to South Korea was, however, miniscule, from $3.42 billion in 2009-10 to $ 4.84 billion in 2019-20 and $4.68 billion in 2020-21.
Source: The Hindu Businessline
In a tweet, Goyal said he discussed with Yeo key issues relating to bilateral trade and investments, reviewed progress on the upgrade of the Comprehensive Economic Partnership Agreement (FTA), and deliberated on ways to fast-track trade negotiations. Commerce and industry minister Piyush Goyal on Tuesday met South Korean trade minister Yeo Han-koo here and discussed ways to expedite trade negotiations, including on the planned upgrade of an existing free trade agreement (FTA) between the two countries. In a tweet, Goyal said he discussed with Yeo key issues relating to bilateral trade and investments, reviewed progress on the upgrade of the Comprehensive Economic Partnership Agreement (FTA), and deliberated on ways to fast-track trade negotiations. New Delhi has been raising concerns about its trade imbalance with Seoul and market access issues being faced by its exporters there, primarily due to non-tariff barriers. The bilateral trade has been heavily tilted in favour of Korea. While Korea has successfully reaped the benefits of its free trade agreement with India, which came into force in 2010, Indian exporters haven’t quite benefitted from it. India imported goods worth as much as $15.7 billion and $12.8 billion, respectively, from Korea in FY20 and FY21 but its exports to that country stood at only $4.8 billion and $4.7 billion during this period. Moreover, Indian exporters have been complaining about huge non-tariff barriers there. India ships out mainly aluminium, mineral fuels and organic chemicals to Korea and imports steel, capital and consumer goods, among others, from there. The substantial trade imbalance has prompted India to plan to review the FTA, formally called Comprehensive Economic Partnership Agreement. Since its pull-out of the Beijing-dominated RCEP trade negotiations in November 2019, India has been seeking to expedite talks with key economies for “fair” and “balanced” trade pacts. While India has ramped up talks with the UAE, Australia and the UK for FTAs, it has also been exploring the feasibility of either reviewing or upgrading various existing trade agreements. As part of this, India is seeking a review of its FTAs with Asean, Japan and South Korea to make them more balanced.
Source: Financial Express
The index of industrial production (IIP) shrank a tad in November from the pre-Covid (same month in FY20) level, reversing a rise witnessed in the previous three months. Retail inflation quickened to a six-month high of 5.59% in December from a year before and industrial production growth nosedived to a nine-month low of 1.4% in November, presenting a double whammy for policy-makers as they brace for the next year’s Budget. Dearer food products, which dominate the Consumer Price Index, offset a slight moderation in fuel inflation caused by a recent tax cut, and core inflation held steady at 5.85%. Food inflation – driven by elevated prices of the mostly-imported edible oils, sugar and certain protein-based items — jumped to 4.05% in December from 1.87% in the previous month. Still, given that inflation remained within the Reserve Bank of India’s target band (2-6%) for the sixth straight month, the monetary policy committee (MPC) will likely continue with its growth push in its next meeting in February and wait a bit longer for further confirmation of the underlying price pressure in the economy. Wednesday’s data release, however, prompted some analysts to predict a 25 basis point hike in the benchmark lending rate in the MPC’s meeting in April, given the external headwinds. The global commodity prices, especially that of oil, remain elevated and the US Federal Reserve may quicken the pace of tapering its asset purchases, raising the risks of capital flights from emerging economies. The index of industrial production (IIP) shrank a tad in November from the pre-Covid (same month in FY20) level, reversing a rise witnessed in the previous three months. Importantly, on a year-on-year basis, capital goods output shrank at the fastest pace (3.7%) in nine months in November and consumer durables witnessed the worst contraction (5.6%) in 15 months despite a favourable base. This suggests that a durable recovery in investment as well as consumption remains far from sight. On top of it, heavy downpours in Southern India slowed down the growth of infrastructure goods output to just 3.8% in November from 6.6% in the previous month. Icra chief economist Aditi Nayar said although the performance of several high-frequency gauges, such as GST eway bills, rail freight traffic, electricity generation and non-oil exports, picked up in December, an unfavourable base may limit the IIP growth to sub-1% in that month. Growth in mining, manufacturing and electricity remained lower than the previous month at 5%, 0.9% and 2.1%, respectively. Commenting on inflation, Nayar said, despite the hardening of price pressure, the uncertainty triggered by the third wave is sure to take precedence when the MPC meets next month. “The duration of the current wave and the severity of restrictions will determine whether policy normalisation can commence in April 2022, or be delayed further to June 2022,” she added. In its statement last month, the MPC had acknowledged that “cost-push pressures from high industrial raw material prices, transportation costs, and global logistics and supply chain bottlenecks continue to impinge on core inflation”. Of course, the slack in the economy is muting the pass-through of rising input costs to output prices. It forecast CPI inflation at 5.3% for 2021-22; 5.1% in the third quarter and 5.7% in the last quarter, with risks broadly balanced. Meanwhile, fuel and light inflation moderated for a second straight month to 10.95% in December from 13.35% in November and 14.35% in October, in the wake of the tax cut by the Centre and most states. Sunil Kumar Sinha and Paras Jasrai said the economy is still in the midst of “anaemic investment and consumer demand”. Both capital and consumer durables have now recorded a deceleration for two successive months. With the rise in Covid cases and subsequent curbs imposed by the state governments will not only accentuate the uncertainty but also adversely impact the normalisation of economic activities, they said.
Source: Financial Express
Aditya Birla Fashion and Retail is currently trading at Rs. 300.80, up by 6.70 points or 2.28% from its previous closing of Rs. 294.10 on the BSE. The scrip opened at Rs. 298.00 and has touched a high and low of Rs. 307.75 and Rs. 295.00 respectively. So far 295005 shares were traded on the counter. The BSE group ‘A’ stock of face value Rs. 10 has touched a 52 week high of Rs. 310.00 on 10-Nov-2021 and a 52 week low of Rs. 148.60 on 01-Feb-2021. Last one week high and low of the scrip stood at Rs. 307.75 and Rs. 280.50 respectively. The current market cap of the company is Rs. 28238.56 crore. The promoters holding in the company stood at 56.13%, while Institutions and Non-Institutions held 32.01% and 11.86% respectively.In a bid to bolster sustainable practices in the apparel and textile industry, Aditya Birla Fashion and Retail has partnered with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. The partnership is being implemented by the company and GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). With the support of GIZ, ABFRL along with the Indian industry players will be able to leverage circular business practices and adopt complex processes that are technically superior and consumer-friendly. Aditya Birla Fashion and Retail is engaged in providing branded fashion apparels and accessories, and the retail sale of clothing, footwear and leather articles in stores. It operates through two segments: Madura Fashion & Lifestyle, and Pantaloons. The company’s brands include Louis Philippe, Van Heusen, Allen Solly and Peter England.
Source: Udaipur Liran
Bangladesh has formally conveyed to the Eurasian Economic Union (EAEU) its intent to sign a free trade agreement (FTA) as the country prepares for a socioeconomic status change. The proposal was made recently amid a cue from the Eurasian Economic Commission (EEC), which could seek concurrence of its member-states—Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. These five Eastern European countries have over $1.5 billion annual bilateral trade with Bangladesh, which, Bangladesh commerce ministry officials think, can rise manifold if an FTA is inked. Bangladesh and the EEC signed a memorandum of cooperation in Moscow in May 2019 to take forward bilateral trade. Later, a working group was formed to enhance trade and economic cooperation in 19 sectors. The first meeting of the working group was held in November last in Moscow, with the Bangladesh side led by commerce ministry additional secretary Noor Mohammad Mahbubul Haq while the EEC side headed by its board member Sergey Glaziev. In the meeting, Bangladesh expressed interest in concluding an FTA with the EAEU and the EEC suggested sending a formal proposal in this regard, according to Bangla media reports. In fiscal 2019-20, Bangladesh exported goods worth $398 million to EAEU member states while imports from there were worth $1.106 billion.
Source: Business Standard
"The IMF is not a magic wand," central bank Governor Ajith Nivard Cabraal said Sri Lanka ruled out an IMF bailout today and said it plans to seek another loan from China to address an economic crisis that has led to food and fuel shortages. “The IMF is not a magic wand,” central bank Governor Ajith Nivard Cabraal told a news conference in Colombo. “At this point, the other alternatives are better than going to the IMF.” Cabraal added that talks with China over a new loan were at an “advanced stage”, and a fresh agreement would service existing debt to Beijing. “They would assist us in making the repayments... the new loan coming from China is in order to cushion our debt repayments to China itself,” he said. Cabraal’s remarks come days after a visit from Chinese Foreign Minister Wang Yi who discussed a debt payment restructure with President Gotabaya Rajapaksa. Beijing is already the island’s biggest bilateral lender, accounting for at least 10 per cent of Sri Lanka’s external debt.
Source: Fibre 2 Fashion
Colombiatex will be the first 2022 trade show for Italian textile machinery manufacturers. For the textile machinery industry, 2022 opens with the resumption of physical trade shows, and Colombiatex de las Américas, the main Colombian textile trade event, which will take place in Medellin from January 25 to 27, will open the new year. The Italian textile machinery sector will once again play a leading role in Colombia with a large presence. 19 Italian textile machinery manufacturers will be exhibiting at the exhibition organized by Italian Trade Agency and ACIMIT, the Association of Italian Manufacturers of Textile Machinery. The following ACIMIT member companies will exhibit collectively - Bonino, Btsr, Color Service, Crosta, Fadis, Flainox, Kairos, Mactec, Mcs, Nexia, Ratti, Reggiani, Santoni, Savio, Smit, Sperotto Rimar and Tonello. “For years, the Colombian market has been one of the main South American destinations for Italian textile machinery exports,” confirms Alessandro Zucchi, president of ACIMIT. “The development of a national fashion sector makes the demand for advanced textile technologies by Colombian companies even more dynamic”. Italian exports to the important South American market in the first nine months of 2021 reached a value of EUR 9.3 million, in strong growth (over +130%), not only compared to the value recorded last year, but also to that of 2019. More than half of the demand for Italian machinery in Colombia refers to finishing machines. The presence at Colombiatex of Italian companies with their own personnel is a further sign of confidence for the beginning of 2022. “Compared to previous editions of the event,” states Mr. Zucchi. “We note a greater number of Italian exhibitors, although the health emergency is far from over and there is great uncertainty characterizing the world economic scenario (due to the considerable increase in the cost of raw materials and shipping, the scarcity of electronic components, etc.). The Italian companies exhibiting in Medellin testify to the optimism with which the entire Italian textile machinery industry is looking towards this 2022 year.”
Source: Knitting Industry
The consumer price index climbed 7% in 2021, the largest 12-month gain since June 1982, according to Labor Department data U.S. consumer prices soared last year by the most in nearly four decades, illustrating redhot inflation that sets the stage for the start of Federal Reserve interest-rate hikes as soon as March. The consumer price index climbed 7% in 2021, the largest 12-month gain since June 1982, according to Labor Department data released Wednesday. The widely followed inflation gauge rose 0.5% from November, exceeding forecasts. Excluding the volatile food and energy components, so-called core prices accelerated from a month earlier, rising by a larger-than-forecast 0.6%. The measure jumped 5.5% from a year earlier, the biggest advance since 1991. The increase in the CPI was led by higher prices for shelter and used vehicles. Food costs also contributed. Energy prices, which were a key driver of inflation through most of 2021, fell last month. The data bolster expectations that the Fed will begin raising interest rates in March, a sharp policy adjustment from the timeline projected just a few months ago. High inflation has proven more stubborn and widespread than the central bank predicted amid unprecedented demand for goods along with capacity constraints related to the supply of both labor and materials. Meanwhile, the unemployment rate has now fallen below 4%. Against this evolving backdrop, some Fed policy makers have said that it could be appropriate to begin shrinking the central bank’s balance sheet soon after raising rates. Market expectations for Fed tightening expected in March and 2022 as a whole were largely unchanged after the report. Yields on 10-year Treasuries fluctuated while S&P 500 futures maintained gains and the dollar extended its decline on the day. “In terms of where the Fed is on their dual mandate—inflation and the labor market— they’re basically there,” Michael Gapen, chief U.S. economist at Barclays Plc, said on Bloomberg Television. “I don’t really think anything stops them going in March except one of these kind of outlier events. I think they’re ready.” The energy index declined 0.4% from November, the first monthly decline since April as gasoline prices slid. Food inflation climbed 0.5%, a slight deceleration from the previous month due to falling costs for meats. “What we have now is a mismatch between demand and supply. We have very strong demand in areas where supply is constrained, particularly around goods, particularly around things like cars,” Fed Chair Jerome Powell told the Senate Banking Committee on Tuesday. Desperate to fill open positions, businesses are increasing pay to attract and retain workers, particularly at the lower end. But rising prices are eroding those wage advances. Inflation-adjusted average hourly earnings dropped 2.4% in December from a year earlier, the biggest drop since May, separate data showed Wednesday. However, compared with a month earlier, they rose 0.1%, the first gain in three months. Shelter costs—which are considered to be a more structural component of the CPI and make up about a third of the overall index—rose 0.4% from the prior month. Other gauges of home prices and rents have surged last year, likely presaging a sharp acceleration in the report’s housing metrics this year and offering an enduring tailwind to inflation. Omicron—the dominant Covid-19 variant in the US—is poised to further disrupt already fragile supply chains as quarantines and illness prevent some employees from going to work. Spending on services like travel may slow, pushing down prices, but goods prices may move higher.
Source: Business Standard
