Every Monday, the Plain Facts section of Mint has major data releases and events to watch over the coming week. This week, the International Monetary Fund (IMF) will bring out its biennial World Economic Outlook, which will present growth forecasts for the global economy. Financial results for the March-ended quarter are attributable to ICICI Bank and Nestle India. Things to watch are:
1.World Economic Outlook
The IMF will release its latest growth forecast on Tuesday. In its last update in January, it had already lowered its 2022-23 growth forecast for global output due to an omicron wave, disrupted recovery and high inflation. The IMF had said that the global economy is entering a weaker position in 2022 than before. Since then the situation has only worsened since the Russo-Ukraine War. The IMF said in March that India is likely to be affected more badly than China. The sharp rise in oil prices presents a significant trade shock. Demand for India’s exports could decline with slowdowns in the US, EU and China, while supply-chain disruptions could adversely impact imports as well. The tightening of financial conditions could hurt domestic demand and fiscal position along with rising cost of borrowings. Therefore, a fall in growth forecasts is on the cards for both the world and India.
2.ICICI Bank Update
India’s third largest lender will present its earnings on Saturday for the March quarter and the entire fiscal year 2021-22. In October-December, ICICI Bank had reported strong growth in its net profit and credit growth and a decline in net non-performing assets, beating analysts’ expectations. Further improvement is expected in the recently ended quarter. Analysts noted that the third wave did not have much impact on the recall and credit demand. Hence, the March quarter disbursements witnessed full business activity after two years, with seasonally strengthening. The strong performance was likely driven by healthy credit growth in the retail and corporate sectors, with profits driven by lower spending. Analysts at Kotak Institutional Equities expect ICICI Bank to post 64% year-on-year growth in its profit after tax. Loan growth is expected to be 16% year-on-year. In general, the banking and financial sector is gearing up to please investors and ICICI Bank is no different.
3. Nestle Earnings
Nestle India will announce its earnings for the first quarter of 2022 on Thursday. It follows the January-December fiscal year. The fast-moving consumer goods (FMCG) giant was in the red in the last quarter of 2021, after reporting a growth in its profits for four consecutive quarters. However, net profit for the full year was 3% higher than what it had recorded. 2020 FMCG sector has been under selling pressure as inflation has hit demand. Data from market researcher Nielsen shows that FMCG volumes declined year-on-year in January-February. Despite this, Nestle India’s profit is expected to increase in the January-March quarter as compared to the same period last year. ICICI Direct expects from the company, which recently declared interim dividend 25 per share for 2022, to register a 4.5% year-on-year increase in net profit.
4.Crew-4 Launch
NASA’s SpaceX Crew-4 mission is scheduled to launch to the International Space Station (ISS) on Saturday. The campaign is the fourth crew rotation mission and will have four astronauts. Crew-4 will land on a SpaceX Crew Dragon, named Freedom, atop the company’s Falcon 9 rocket. The astronauts are due to return later in the year in the fall. They will conduct the experiment and maintenance activities. Research will take place in physical science, health technologies and plant science in preparation for human exploration beyond low-Earth orbit. Studies include the aging immune system and artificial retina construction. The crew is also scheduled to conduct a pair of spacewalks to continue development of the ISS for new solar arrays to increase its total power supply availability. If the launch is delayed on Saturday, the campaign has two backup launches on Sunday and April 25.
5.EU Inflation
The Russia-Ukraine war has led to extreme price pressures globally through higher commodity and food prices, with the euro area also facing heat in March. Data for the month to be released on Thursday, according to Flash estimates, will show inflation likely to pick up sharply from 5.9% in February to an all-time high of 7.5%. Should inflation settle to 7.5% in March, it would be nearly four times the European Central Bank’s 2% midpoint target. While the ECB gave a status quo policy last week, it confirmed it would end the bond purchase program in the third quarter of the year. There may be some moderation in inflation in April, but high inflation risks for the euro bloc are far from over. However, the ECB has said it will maintain a level of resilience as war also has a significant impact on economic activity in the region, indicating the pace of normalization will depend on how the situation develops.