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Wednesday,01-December-2021

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US GDP in Q2 to contract by annualized rate of 37%: IMF

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US GDP is expected to contract by an annualized rate of 37 per cent in the second quarter and by 6.6 per cent for 2020 as a whole, the International Monetary Fund (IMF) staff said on Friday.

The longest economic expansion in US history has been derailed by the unanticipated advent of the COVID-19 pandemic, with the poorest households facing “particularly precarious prospects”, according to the concluding statement, which describes the preliminary findings of IMF staff at the end of an official staff visit, reports Xinhua news agency.

“The economic costs of the crisis are being borne disproportionately by the poor and vulnerable, bringing into stark relief deep inequities that have long afflicted the US,” the IMF staff said on Friday.

“The pandemic has also underscored some of the structural shortcomings of the U.S. health system whereby the provision of healthcare is fragmented, decentralized, predominantly employer-based, at high cost, and with a significant share of low-income households lacking coverage.”

The nature of the pandemic has created particularly large strains for labour intensive, face-to-face services and the unemployment rate among lower income households, that have few financial buffers, “is expected to remain high”, according to the statement.

Noting that US policymakers acted “quickly and assertively” to protect livelihoods and businesses and to mitigate the lasting economic costs of the pandemic, the IMF staff said there are “tremendous uncertainties” surrounding the economic propagation of the COVID-19 shock.

“The principal risk, and one that is the most difficult to quantify, is that a resurgence in the number of COVID-19 cases in the U.S. could lead to renewed, partial shutdowns in order to preserve lives, particularly of vulnerable populations,” they said.

There are already urgent warning signs that the depth of the economic contraction and the sectoral distribution of economic losses will lead to a “systemic increase in poverty”, adding to macro risks, they continued.

The IMF staff also noted that the significant increase in debt levels gives rise to important vulnerabilities.

General government debt is expected to rise to 160 per cent of GDP by 2030 even without further rounds of fiscal stimulus, and job losses and income declines will lead to increased household indebtedness, they said, adding that corporate debt has already increased above the already-high pre-pandemic levels.

Prior to the pandemic and even after a decade-long expansion, the US faced troubling social and economic outcomes related to poverty; inequalities of opportunity and declining socioeconomic mobility; an increasingly polarized income distribution; rising barriers to trade and foreign investment; and an unsustainable upward path for public debt, the IMF staff noted.

In order to tackle the consequences of the pandemic and addressing the existing problems, the US government should roll out a further round of fiscal measures in the coming months that “boost demand, increase health preparedness, and support the most vulnerable”.

Fiscal measures that should be considered, according to the IMF staff, include: investing in public health; supporting poor families; boosting household income; labor market policies; incentivizing investment; boosting consumption; supporting state governments; improving education opportunities; infrastructure investments.

The IMF staff also urged the government to make efforts to reverse existing trade restrictions and tariff increases while working with partner countries to address policies that distort trade flows and investment decisions.

Business

Samsung unveils new auto chips for high-end cars

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Samsung Electronics on Tuesday unveiled three new automotive chips as demand for advanced chips is growing among global carmakers to produce cars with better connectivity and more sophisticated infotainment features.

The South Korean tech giant said its latest chip products are designed to enable faster 5G connectivity needed for downloading high-definition video content, immersive in-car infotainment systems and a stable power supply.

“Smarter and more connected automotive technologies for enriched in-vehicle experiences, including entertainment, safety and comfort, are becoming critical features on the road,” Park Jae-hong, executive vice president of the company’s System LSI Custom SOC Business, said in a statement.

Among the three, the Exynos Auto V7 in-vehicle infotainment system is installed in Volkswagen’s latest In-Car Application-Server (ICAS) 3.1, developed by LG Electronics’ vehicle component solutions division, the company said.

The chip comes with a neural processing unit “for convenient services, such as virtual assistance that can process visual and audio data for face, speech and gesture recognition features.”

Samsung has ramped up efforts to develop advanced chips for cars, a market that has grown significantly in recent years fueled by higher levels of car electrification and a further uptake in electric vehicles, reports Yonhap news agency.

More cars are now being equipped with advanced features like artificial intelligence and 5G-based telecommunications.

London-based research firm IHS Markit forecast the global market for automotive semiconductors to grow 7 percent annually to reach $67.6 billion in 2026.

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Go Fashion shares listed 90% over issue price on debut

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Shares of Go Fashion made its debut on the exchanges on Tuesday with a premium of 90 per cent over its issue price of Rs 690 at Rs 1,316.

On the listing day, the shares of the company settled at Rs 1,250.

“As the number of working women is increasing along with evolving fashion trends, it is expected that the company can have a strong growth momentum,” said Santosh Meena, Head of Research at Swastika Investmart.

“The company has a strong management team with a mixed bag of financials and it is expected that it may perform well,” Meena added.

The investors who got the allotment can put a stop loss of Rs 1,000 and hold the stock with a long-term view, while safe investors can book the profit and wait for new buying opportunities at the lower levels, Meena added.

Founded in 2010, Go Fashion is a women’s wear brand.

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India to see 500 mn 5G mobile subscriptions by 2027: Report

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The 5G technology will represent around 39 per cent of mobile subscriptions in India at the end of 2027, estimated at about 500 million subscriptions, a new Ericsson report said on Tuesday.

The number of smartphone subscriptions is expected to be 810 million at the end of 2021 and is projected to grow at a CAGR of 7 per cent, reaching over 1.2 billion by 2027 in the country, according to the mobility report by Swedish telecommunication giant Ericsson.

The average traffic per smartphone in the India region is the second-highest globally and is projected to grow to around 50GB per month in 2027.

“Total mobile data traffic in India has grown from 9.4 EB (exabyte) per month in 2020 to 12 EB per month in 2021 and is projected to increase by more than 4 times to reach 49EB per month in 2027,” the report projected.

According to Nitin Bansal, Head of Ericsson India and Head of Network Solutions for South east Asia, Oceania and India, Ericsson, 5G will serve as a socio-economic multiplier for the country.

“We are preparing the communication service providers for a seamless introduction of 5G in the country based on our global deployment experience , our innovative and competitive 5G portfolio as well as the 5G trials we are doing with Indian operators to showcase the possibilities with 5G,” Bansal said in a statement.

In the India region, 4G is expected to remain the dominant technology in 2027, however the 4G subscriptions are forecast to drop from 790 million in 2021 to 710 million in 2027, showing an annual average decline of 2 per cent.

The reliance on mobile networks to stay connected and work from home has contributed to the average traffic per smartphone increasing to 18.4GB per month in 2021, up from 16.1GB per month in 2020.

The average traffic per smartphone in the India region is the second-highest globally and is projected to grow to around 50GB per month in 2027, the report mentioned.

Ericsson recently carried out 5G trials with Airtel and Vi, where it demonstrated enhanced mobile broadband and Fixed Wireless Access (FWA) use cases with 5G.

Globally, there has been almost 300-fold increase in mobile data traffic since 2011, the report noted.

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