Latest news with #economicactivity
Times of Oman
10 hours ago
- Business
- Times of Oman
Credit growth influenced by economic activity rather than surplus liquidity: Report
New Delhi: Credit growth in the economy is influenced more by overall economic activity than by the size of the liquidity surplus, according to a recent report by Standard Chartered, an international bank. The report noted that while a high liquidity surplus may provide some support to unsecured personal loan growth (excluding consumer durable loans), it does not automatically lead to broad-based credit growth. It stated, "Credit growth depends more on economic activity than the size of the liquidity surplus; however, unsecured personal loan growth (ex-consumer durables) could get a fillip on a large liquidity surplus". In fact, as the report mentioned that the credit growth excluding unsecured personal and consumer durable loans tends to slow during periods of excess liquidity. This trend suggested that the real demand for credit, which is closely linked to economic activity, is a more important driver than the availability or cost of funds. "Slower economic activity triggers action by the central bank to increase the liquidity surplus as a counter-cyclical measure," the report said. However, despite such efforts, overall credit (excluding unsecured personal and consumer durable loans) as a share of GDP has declined during past episodes of high liquidity surplus. For example, the report highlighted that during the period from December 2016 to September 2017, when liquidity surplus ranged between 2.6 per cent and 3.3 per cent of Net Demand and Time Liabilities (NDTL), credit (excluding unsecured personal and consumer durable loans) as a percentage of GDP fell from 48.9 per cent to 46.2 per cent. This decline continued until mid-2019. Interestingly, unsecured personal loan growth (excluding consumer durables) has shown a strong uptrend over the last decade. Its size more than doubled to around 6 per cent of GDP. While this growth is largely driven by structural factors such as improved access to credit and the rise of digital lending, the report pointed out that its pace of expansion tends to increase during periods of high liquidity surplus. During March 2021 to March 2023, as per data shared by the report amid a large liquidity surplus and relaxed credit conditions, the share of unsecured personal loans in GDP rose at a faster pace than during previous similar episodes.
Times of Oman
3 days ago
- Business
- Times of Oman
High-frequency indicators point towards resilient economic activity in India: RBI
New Delhi: All high-frequency indicators point towards resilient economic activity in India across the industrial and services sectors, even as global economy is in a state of flux, reeling from the twin shocks of trade policy uncertainties and a spike in geo-political tensions, RBI said in its monthly bulletin. The central bank report highlighted the benign domestic price situation, with headline inflation staying below the tolerance level (4 per cent) for the fourth consecutive month in May. In its State of the Economy segment, the RBI said financial conditions remained conducive to facilitate an efficient transmission of rate cuts to the credit market. The RBI recently reduced the repo rate by 50 basis points to boost economic growth. Meanwhile, the central bank report said the optimism generated by the US administration's temporary tariff freeze and trade deals has kept financial market sentiments buoyant in May and early June 2025. However, following the Iran-Israel conflict, heightened uncertainty and volatility have once again gripped financial markets. The June OECD and World Bank reports reaffirmed the possibility of a marked deterioration in medium-term global economic prospects amidst rising trade barriers and restrictions. While food prices softened, non-food commodity prices have shown volatile movements, accentuated by geopolitical tensions. Crude oil prices have surged since June 13 due to renewed tensions in the Middle East, while gold prices have also rallied due to safe-haven demand. "Amidst heightened concerns on their domestic growth outlook, several central banks utilised the headroom provided by lower inflation prints to further reduce policy rates," RBI said. The provisional estimates released in May have reaffirmed growth to be 6.5 per cent in 2024-25, with a significant sequential pickup in the fourth quarter. "Various high-frequency indicators for May point to signs of resilient economic activity across the industrial and services sector. In fact, among the countries surveyed for the Purchasing Managers' Index (PMI), overall expansion in activity was the highest in India, with the expansion in new export orders witnessed in May being an outlier, amidst contraction seen in other major economies," the RBI report read. Capacity utilisation by manufacturing firms remained above its long-period average. High-frequency indicators of aggregate demand for May also suggested a pick-up in rural demand, especially given the strong performance of the agricultural sector. The agriculture sector showed a broad-based increase in production across most major crops during 2024-25. According to the RBI, forward-looking surveys of consumer sentiments show stable consumer confidence for the current period and improved optimism about the future. "All of these indicate considerable resilience of the Indian economy, notwithstanding the global economic, trade, and geopolitical uncertainties," the RBI said.
Yahoo
3 days ago
- Business
- Yahoo
When will mortgage rates go back down to 6%?
Mortgage rates haven't exactly been affordable lately. The average 30-year mortgage rate has hovered between 6% and 7% for the bulk of the last two years. At one point, it even reached as high as 7.79% — the highest point in decades, according to Freddie Mac. It's a far cry from the bargain-basement rates we saw in the height of the COVID-19 era, when rates bottomed out at a mere 2.65%, the lowest ever recorded. Those ultra-low rates were likely a once-in-a-lifetime occurrence, borne from the Federal Reserve's need to spur economic activity after widespread shutdowns. However, that doesn't mean mortgage rates are stuck at today's higher levels forever. Just when will they drop back down below 6%, though? And should you wait for 6% rates before buying a house? Here's what you can expect. This embedded content is not available in your region. Read more: Historical mortgage rates — How do they compare to current rates? In this article: What high mortgage rates mean for home buyers Mortgage rate predictions for 2025 and beyond When will rates drop below 6%? How to get a lower mortgage rate in the meantime FAQs To understand just how much today's higher rates impact buyers and borrowers, it's important to consider home prices, which have been rising steadily for years. Right now, the median home price sits at $416,900, according to Census data. At a 6.81% mortgage rate — the average for a 30-year term as of June 18 — you'd pay about $2,720 per month on a median-priced home. And that's just the mortgage principal and interest. It doesn't even factor in homeowners insurance, mortgage insurance, or property taxes, which also make up your monthly mortgage payment. Over one year, that's more than $32,600 — accounting for over half of the country's median annual earnings. (Generally speaking, you shouldn't spend more than 25% to 35% of your income on housing costs.) Assuming you're getting a 30-year loan term, here's a look at what you'd expect to pay at various interest rates for a median-priced home ($416,900) today: As you can see, the difference between a sub-6% rate and today's rates is pretty significant. Interest rates have been hovering just below 7% for a while. In this scenario, the difference between a 7% rate and a 6% rate would be $274 per month or $3,288 for borrowers, mortgage rates are largely expected to decline this year — at least a little bit. In its June Housing Forecast, Fannie Mae projected a 6.6% average by the end of the third quarter and 6.5% by year's end. The Mortgage Bankers Association (MBA), a trade organization, is more conservative in its predictions. In June, the MBA forecasted a 6.7% rate by the end of 2025 — down just slightly from today's 6.81% average. So, while interest rates should inch closer to 6% in 2025, we might not see them hit 6% until 2026. Rates' direction will depend heavily on inflation and the Federal Reserve's response to it. According to the central bank's economic projections, it expects to cut the federal funds rate two times this year. 'I would expect mortgage rates to stay in the current range until we see what direction inflation is heading,' Jennifer Beeston, executive vice president of national sales at Rate, said via email. The next Consumer Price Index (CPI), a key measure of inflation, will be released in mid-July, and the Fed will meet later that month. If the Fed decides to cut rates, the decrease would likely trickle down to mortgage rates too, but borrowers shouldn't expect any drastic drops. 'Home buyers can reasonably expect mortgage rates in the 6.5% to 7% for the rest of 2025,' Jeff Taylor, an MBA board member and founder and managing director at Mphasis Digital Risk, said via email. Dig deeper: How the Federal Reserve impacts mortgage rates Looking further out, mortgage rates — at least on conventional loans — probably won't fall under 6% until 2026 or later. 'In order for conventional mortgage rates to hit below 6%, we need to see a reduction in inflation as well as increased confidence in the continued containment of inflation, which is hard to currently envision given the macroeconomic and geopolitical outlook,' Beeston said. Aside from tamped-down inflation, Taylor said unemployment would need to rise too. 'This would prompt the Fed to cut,' he said. 'Global investors would also need to prove their belief in U.S. Treasury and mortgage bond safe-haven trades if geopolitical conflicts keep escalating, which would push bond yields up and mortgage rates down.' Two factors also make things even more unpredictable: a potential replacement for Fed Chairman Jerome Powell mid-next year and the long-term impacts of Trump administration tariffs. 'Sub-6% rates are unlikely until we see the inflation impacts of tariffs,' Taylor said. 'But rates in the 6% to 6.5% range are possible ahead of the Fed leadership switch in May 2026.' As of its June 2025 forecast, Fannie Mae expected rates to end 2026 at 6.1%. The MBA currently has no sub-6% projections on its 2025 or 2026 forecasts, either. Learn more: How does inflation affect mortgage interest rates? Though significantly lower mortgage rates aren't on the horizon anytime soon, there are still steps you can take to make getting a mortgage more affordable. Here are some tips for getting the lowest mortgage rate possible: Improve your credit score: A higher credit score generally qualifies you for lower interest rates, as it indicates you're a lower risk of defaulting on your mortgage. Make a bigger down payment: When you make a larger down payment, your mortgage lender has less money on the line. The company may reward you with a lower interest rate in return. Get a rate buydown: Mortgage interest rate buydowns allow you to pay a fee to temporarily reduce your interest rate, usually for the first few years of the loan. Buy points: Mortgage discount points lower your interest rate for your entire loan term, but you'll pay an up-front fee. You'll pay these fees at closing. Shop around: You can also compare loan quotes from several mortgage lenders. Freddie Mac estimates that getting quotes from at least four lenders can save you around $1,200 annually. You can also explore a shorter loan term or an adjustable-rate mortgage, which may offer lower rates than the traditional, 30-year fixed-rate mortgage. If you're otherwise ready to buy a home but are holding out for lower mortgage rates, it might not be worth the wait. Interest rates probably won't plummet anytime soon. And remember, you can always buy a house now to start building equity, then refinance into a lower interest rate later. The Mortgage Bankers Association projects a year-end average rate of 6.7% on 30-year mortgages. Fannie Mae forecasts an average of 6.5% by the end of 2025. Neither Fannie Mae nor the Mortgage Bankers Association predicts that mortgage rates will fall under 6% in 2025 or 2026. Many factors could change those projections, though, including Federal Reserve moves, inflation, tariffs, and employment data. It is unlikely that mortgage rates will fall as low as 3% again. While this did happen in the post-pandemic years, it was largely due to the Federal Reserve's need to spur economic activity after widespread shutdowns across the nation. Laura Grace Tarpley edited this article.
Yahoo
3 days ago
- Business
- Yahoo
Beyond Metros: City Vitality Index Captures India's Evolving Urban Economic Landscape
Maha Kumbh Drives Surge in Economic Activity MUMBAI, India, June 25, 2025 /PRNewswire/ -- Dun & Bradstreet, a global leader in business decisioning data and analytics, has released its City Vitality Index – Q2 2025, offering a near real-time, satellite-data-based assessment of the economic vibrancy of India's urban areas. The Index leverages NASA's Black Marble dataset to measure economic activity across more than 700 Indian districts, providing a first-of-its-kind view into microeconomic trends through earth observation technology. "The latest edition of the City Vitality Index shows a remarkable nationwide uptick in economic activity, with key drivers including infrastructure expansion, tourism, and major cultural gatherings," said Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet. "The 2025 Maha Kumbh Mela in Prayagraj had an outsized economic footprint — catalyzing growth across multiple cities and sectors. For instance, Prayagraj itself jumped 40 positions in the rankings in the CVI, driven by unprecedented footfall and corresponding spikes in tourism, hospitality, logistics, and local commerce. Nearby cities like Varanasi, Kanpur, and Lucknow also saw secondary growth effects, with improved infrastructure utilization, hotel occupancy, and transport linkages. Event-related investments in sanitation, public transport, and digital infrastructure had spillover effects on construction and local employment across the region. The CVI uncovers new growth centers, with tier-2 and tier-3 cities such as Prayagraj and Kasganj now ranking in the top 25 emerging cities, highlighting the decentralization of India's growth narrative." Maha Kumbh Mela: A Historic Economic Catalyst The 2025 Maha Kumbh Mela Prayagraj witnessed extraordinary attendance of over 660 million people, making it the largest human congregation in recorded history. To put this in perspective, the footfall exceeded the combined population of all 27 European Union countries. This massive influx of pilgrims sparked unprecedented economic activity in Prayagraj and surrounding districts—impacting sectors such as hospitality, transportation, retail, and infrastructure. Prayagraj moved up 38 positions to 1st position in CVI ranking, driven by event-induced economic stimulus. 44% of the top 25 cities this quarter are from Uttar Pradesh, a state that saw amplified economic signals due to Kumbh-related developments and investments. Highlights of the City Vitality Index – Q2 2025: Ahmedabad claimed the 1st rank among metros, rising four positions this quarter. Mumbai slipped to 5th, while Bengaluru, Chennai, and Delhi maintained their ranks, reflecting stable and consistent performance. Sonipat has demonstrated steady growth in CVI score since 2020, reaching an all-time high in current quarter. The expansion of the Delhi Metro's Yellow Line into Sonipat has fueled real estate and commercial development. Kasganj and Kishanganj rose 20+ positions each due to enhanced connectivity from new highway and roadway construction, boosting access to metro cities. Baramulla continued its upward trajectory, breaking into the top 50 cities, compared to the top 150. Sustained growth is attributed to railway projects and regional development programs. Badgam and Bhavnagar saw dramatic rises from the top 300 to the top 100, fueled by greenfield and brownfield infrastructure investments. Sixteen districts, including Agra, Etah, Anand, and Bhavnagar, have consistently moved up in CVI rankings over the last five quarters. Agra and Etah lead with an eight-quarter streak of improvement, reflecting strong and sustained growth. Six districts have seen a steady decline in rankings for five or more quarters, with Nicobar falling for seven straight quarters, indicating areas needing focused policy support. City Vitality Index – A Pulse on India's Urban Economy "The CVI's unique integration of satellite-derived insights with macroeconomic indicators enables policymakers and investors to detect emerging hotspots and assess regional economic resilience," Dr. Singh added. "With a correlation of over 80% with nominal GDP, and ~99% in highly urbanized regions, the CVI is a powerful decision-support tool for India's growth story." As India's urban landscape evolves, the City Vitality Index offers a high-resolution map of economic dynamism—shedding light on both traditional growth engines and unexpected disruptors, like cultural events and connectivity infrastructure. To know more or gain access to the report, write to us at india@ About Dun & Bradstreet: Dun & Bradstreet, a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Dun & Bradstreet's Data Cloud fuels solutions and delivers insights that empower customers to accelerate revenue, lower cost, mitigate risk and transform their businesses. Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal opportunity. For more information on Dun & Bradstreet, please visit Dun & Bradstreet Information Services India Private Limited is headquartered in Mumbai and provides clients with data-driven products and technology-driven platforms to help them take faster and more accurate decisions in domains of finance, risk, compliance, information technology and marketing. Working towards Government of India's vision of creating an Atmanirbhar Bharat (Self-Reliant India) by supporting the Make in India initiative, Dun & Bradstreet India has a special focus on helping entrepreneurs enhance their visibility, increase their credibility, expand access to global markets, and identify potential customers & suppliers, while managing risk and opportunity. India is also the home to Dun & Bradstreet Technology & Corporate Services LLP, which is the Global Capabilities Center (GCC) of Dun & Bradstreet supporting global technology delivery using cutting-edge technology. Located at Hyderabad, the GCC has a highly skilled workforce of over 500 employees, and focuses on enhanced productivity, economies of scale, consistent delivery processes and lower operating expenses. Visit for more information. Click here for all Dun & Bradstreet India press releases. 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Bloomberg
5 days ago
- Business
- Bloomberg
India Growth Firm as Export Orders Soar in June, Flash PMIs Show
India's economic activity picked up in June, driven by a surge in new export orders that boosted the manufacturing sector, according to a flash survey by HSBC Holdings Plc. The manufacturing purchasing managers' index was up at 58.4 from 57.6 in May, while the services purchasing managers' index climbed to 60.7 from 58.8 last month. That helped the composite index jump to 61 compared to 59.3 in May.
