- India’s GST collection has hit all-time high of Rs. 1.42 Lakh Crore in March as economic activity has improved. State wise also, almost all the states have recorded healthy rise over March 2021 numbers.
- India’s core sector growth was four month high in February 2022 at 5.8% due to recovery in steel, electricity and refinery products. Indian Railway has also recorded highest ever loading in the month of March.
- India is planning a strategy to increase wheat exports as the global wheat supply is disrupted due to war as Russia and Ukraine are one of the top wheat exporters.
Economic impact of Russia-Ukraine War:
- The sanctions from west have apparently not stopped Russian president Putin from waging war. Russian currency Ruble has also stabilized after initial slide with increased oil and gas demand.
- However the sanctions will definitely have a severe long term economic impact on Russia.
- There are sanctions on Russian financial institutions and central bank with various banks removed from SWIFT (Network through which International payments are initiated).
- Number of large multinational corporations including ranging from shipping companies (FedEX, UPS), Tech (Apple, Microsoft, Samsung), Automobiles (Ford, GM, Toyota), Banks (Citibank, JPMorgan, Goldman Sachs) to Oil Companies (BP, Shell) have announced exits from Russia which will hurt.
- Global Credit rating have downgraded the Russian government credit rating to junk which will make it very difficult to borrow funds from international markets.
- World Bank expects Russian economy to plunge into a deep recession with contraction of over 11% in 2022.
- On the other hand, World Bank expects Ukraine’s economy to shrink by 45% this year due to war. It said that the war is a staggering humanitarian crisis, a massive blow to Ukraine’s economy and enormous damage to infrastructure.
Sri Lanka Economic crisis:
- Sri Lanka has been going through Economic crisis due to low exports, low foreign exchange reserves and impact on tourism due to Covid-19.
- Many sources put the blame of crisis on the economic mismanagement by the government which took decisions such as Tax cuts like reducing VAT to 8% after 2019 elections, banning all chemical fertilizers in 2021 (which was later reversed), printing record amount of money and excessive borrowing from international capital markets.
- Crisis has sparked political protests in the island nation as people are affected by electricity and food shortages, medicines shortages and double digit inflation. Sri Lankan rupee has also seen a free fall and has become the worst performing currency in last year.
- India has also supported the country with over $2Bn of aid in form of emergency credit lines and supplies.
- However in April, Sri Lanka defaulted on its loan repayments and has now sought funds from IMF.
- Sri Lanka will require number of painful reforms to come out of this crisis, a process that will be complicated by the political instability.
This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.
This material captures the information based on information available in the public domain, public announcements and sources believed to be reliable. Analysis contained herein is based on publicly available information and appropriate assumptions. This material is intended merely to highlight market developments and is not intended to be comprehensive and does not constitute strategic, investment, legal or tax advice. In no event Vora Management Consultancy Private Limited be liable for any use by any party or for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you for evaluating any transaction.
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