New Delhi [India], December 16 (ANI): Fitch Ratings presents a positive outlook for 2024, underlining the nation’s substantial improvement in 2023, surpassing expectations. According to Fitch Ratings, the Asia-Pacific (APAC) Emerging Market Banks Outlook 2024 positions India favourably, anticipating sustained growth and enhanced performance.

The broader APAC region is expected to witness improved financial results across emerging-market banking systems in 2024. Fitch Ratings attributes this optimism to robust economic growth fostering increased demand for loans. Notably, India stands out with an improving sector outlook, aligning well with positive bank operating environments (OE) assessments in the country, showcasing the nation’s resilience and potential in the banking landscape.

While Fitch acknowledges the deteriorating outlook in China due to various policy measures aimed at supporting its economy, the impact on India’s banks within Fitch’s rated portfolio is expected to be less pronounced. India’s banking sector resilience stems from its robust internal mechanisms and the status of domestic systemically important banks.

Elevated interest rates and near-cyclical-high net interest margins (NIM) are identified as key factors supporting profitability in much of APAC. India, along with Indonesia, Thailand, Vietnam, and the Philippines, is poised to experience steady margins and profitability, reflecting the country’s positive macroeconomic conditions.

Fitch expects India to maintain its strong position in terms of earnings growth. Fitch’s macroeconomic forecasts indicate favourable conditions for new business generation in 2024. Nominal GDP growth and loan growth are projected to be within the mid-single-digits to mid-teens range across the region.
For India, this backdrop, coupled with steady employment levels and manageable inflation, is expected to underpin earnings growth, making it a standout performer in the APAC region.

While Fitch expects the Reserve Bank of India (RBI) to lower policy rates in 2024, any further increase to tackle inflation could be beneficial for Net Interest Margins (NIMs) and earnings in the short term. However, sustained rate hikes pose risks to credit demand and asset quality.

Risk control and effective management are emphasized, especially as the sector experiences significant growth in risk appetite, including unsecured retail loans. The implementation of expected loss provisions by RBI could influence loss-absorption buffers, necessitating prudent risk management strategies.

India’s banking sector appears set for a growth trajectory in 2024, leveraging favourable regional and domestic conditions. As the nation continues to fortify its banking infrastructure, manage risk effectively, and adapt to evolving economic dynamics, it stands as a key player in the broader APAC banking landscape.

With an improving sector outlook and positive operating environments, India’s banking sector is well-positioned for sustained growth and stability in the coming year. (ANI)

India eyes economic gains as China’s stimulus fuels surge in global mining demand

New Delhi [India], December 15 (ANI): In a turn of events for India’s economic landscape, China’s sustained stimulus efforts and the industrial recovery in developed nations are set to catalyse a surge in global mining demand throughout 2024.

As projected by Fitch Ratings, the neutral sector outlook is buoyed by significant government spending programs in India, Europe, and the United States, primarily directed towards supporting energy transition initiatives and infrastructure development, both reliant on a steady supply of metals.

Fitch Ratings anticipates a notable uptick in the demand for base metals in 2024, with a specific focus on copper, considered pivotal in the ongoing energy transition. The global consumption of copper is expected to witness a 2.7 per cent increase. Despite adequate mine supply, constraints in smelter capacity are likely to restrict copper production until at least 2025, resulting in a tightly balanced market in the upcoming year.

Further, the demand for aluminium in China is poised for a continuous rise in 2024, driven by higher-than-expected growth of 3.7 per cent in 2023. This surge is particularly attributed to the demand emanating from the renewables sector.

While the rest of the world is set to witness a recovery in aluminium consumption after a decline in 2023, the market is expected to attain a more balanced state in 2024. Nickel consumption is closely tied to battery production, and in 2024, the growth in this sector is projected to offset the slowing demand from the stainless steel industry.

Market analysts, including CRU, suggest that despite broader market surplus expectations over 2024-2026, factors like new processing capacities in Indonesia may influence the supply-demand dynamics in the nickel market.

Zinc demand is anticipated to expand by 3.4 per cent in 2024, rebounding from a 0.4 per cent contraction in 2023. CRU forecasts growth from various regions, including Europe, India, Japan, Korea, the US, and Vietnam.

Despite slowing consumption growth in China, the market is likely to remain in oversupply due to continuous global refined zinc production expansion. The demand for iron ore and metallurgical (met) coal is expected to remain relatively stable in 2024, supported by the recovery in steel production across most global markets, excluding China.

India is anticipated to lead the demand growth for met coal, contributing to a balanced market in 2024. The global trade volumes of thermal coal are projected to decline by 7.4 per cent in 2024, with the peak in 2023 attributed to China’s increased imports. Developed economies, including the EU, Japan, and South Korea, are likely to import less in 2024 due to constraints posed by the energy transition.

The news also highlights the role of changes in monetary policies and geopolitical conflicts as key drivers of investment demand for gold, citing the impact of rising interest rates and geopolitical tensions.

For India, these global trends signal potential economic gains. The surge in demand for metals, especially copper and aluminium, aligns with India’s ambitions for robust economic growth. The country is well-positioned to leverage these opportunities, capitalizing on its role in the global supply chain and reinforcing its standing as a key player in the mining and metal sectors.

As India eyes a transformative economic trajectory, the positive outlook for global mining demand acts as a catalyst for the nation’s economic aspirations in 2024. (ANI)