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Tag: International Monetary Fund

  • India Tops Global Fast Payment Rankings with UPI Powering 18 Billion Transactions Monthly: IMF

    The exponential expansion of the Unified Payments Interface (UPI) has made India the world leader in quick digital payments, according to a recent International Monetary Fund (IMF) study titled “Growing Retail Digital Payments: The Value of Interoperability.”

    India Takes the Lead in Real-Time Payments, Says IMF

    The National Payments Corporation of India (NPCI) introduced UPI in 2016, and it has completely changed how Indians conduct business. With only a few touches, customers may connect several bank accounts to a single mobile app, facilitating quick, safe, and inexpensive transactions.

    The Press Information Bureau (PIB) reports that UPI handles more than 18 billion transactions every month at the moment. It facilitated 18.39 billion transactions in June 2024 alone, totalling INR 24.03 lakh crore, a 32% year-over-year growth over June 2023’s 13.88 billion transactions.

    Commenting on the development, Chandra Bhushan, Country Head at Enigmatic Smile(Single.id) stated, “One-fifth of India’s population is on UPI! These numbers validate the powerful role that a digital public infrastructure like UPI has played in transforming a developing nation like India into a digital-first powerhouse. For retailers too, UPI has not only enabled last-mile financial inclusion, expanding their consumer base but also opened up a plethora of opportunities to help them build customer loyalty through technology-backed reward platforms. In a highly competitive, yet hugely potential retail landscape like ours, a robust, safe, and seamless rewards technology like Single.id can be the biggest differentiator for success, helping accelerate the next phase of India’s retail economy.”

    From Cash to Code: How UPI Transformed India’s Economy

    According to the PIB, UPI has driven India away from cash and card-based payments and towards a digital-first economy. The system has grown to be a potent force for financial inclusion, especially for small enterprises and people.

    With 491 million users, 65 million businesses, and 675 banks connected, UPI now makes up 85% of all digital payments in India. Additionally, it has a strong global footprint, powering almost half of all real-time digital payments globally.

    UPI Goes Global: 7 Countries and Counting

    The reach of UPI has expanded outside India. With France being its first foray into the European market, it operates in seven countries: the United Arab Emirates, Singapore, Bhutan, Nepal, Sri Lanka, and Mauritius. For Indians who live or travel outside, this development is making cross-border payments easier.

    Namibia Signs UPI Deal, Africa Joins the Real-Time Payments Wave

    In order to create a real-time payments platform similar to the Unified Payments Interface (UPI), the Namibian central bank and the National Payments Corporation of India (NPCI) have inked a licensing deal.

    According to Dammu Ravi, secretary in the external affairs ministry, during a press briefing on the outcomes of Prime Minister Narendra Modi’s visit to the African nation, NPCI and the Namibian central bank have signed a licensing agreement to implement UPI in Namibia for real-time payments, making it the first country of its kind in the world.

    Namibia would be able to create a real-time payment system thanks to the agreement. Notably, more than a year ago, the Bank of Namibia and NPCI International Payments Limited (NIPL), the organisation’s international arm, originally inked a deal to create a digital payments system.

    As part of the collaboration, the NPCI committed to providing the Bank of Namibia with technology and other knowledge to aid in the creation of a digital payments system. In an effort to boost UPI use globally, the NPCI has inked agreements with a number of nations.

  • India Becomes World Leader in Fast Payments — Speed Beats All

    According to an IMF statement, the rapid expansion of UPI has allowed India to surpass all other nations in terms of payment speed, while the use of traditional payment methods, such as credit and debit cards, is decreasing.

    The NPCI created the Unified Payments Interface, a real-time and instantaneous payment system, to enable mobile phone interbank transactions.

    According to the IMF’s Fintech Note, “Growing Retail Digital Payments: The Value of Interoperability,” UPI has expanded rapidly since its inception in 2016, while some stand-ins for cash usage have started to fall.

    India Now Processes 18 Billion Transactions Per Month

    “India currently pays more quickly than any other nation. Cash usage proxies have decreased concurrently,” the note stated. Using granular data spanning the universe of transactions on India’s UPI, an interoperable platform that has grown to become the largest retail quick payment system globally by volume, the note provides evidence in line with this methodology.

    According to the fintech report, UPI has expanded rapidly since its 2016 inception, although other indicators of cash usage have started to fall. In India, UPI currently handles over 18 billion transactions monthly and is the most popular electronic retail payment method.

    Fintech Notes provide policymakers with useful guidance on significant topics from IMF staff members. According to the report, interoperable payment systems like UPI offer an alternative to closed-loop systems and may encourage the use of digital payments. Users of various payment providers can make payments with ease thanks to these platforms.

    Digital Payments Outrun Cash Withdrawals

    The report went on to say that it is challenging to estimate cash usage since, particularly in the informal sector, cash transactions might take place anonymously and may not be documented in any ledger. “But we can estimate cash usage with the value of automated teller machine (ATM) withdrawals in each district,” the note continued. “A very similar picture emerges when we compare the effect of integration on transaction values to cash withdrawals,” it added.

    According to the note, areas that experience higher rises in de facto interoperability see a significant and sustained increase in the total number of digital payments compared to cash withdrawals following integration.

    According to this data, interoperability can help promote the shift away from cash and the use of digital payments. Maria Soledad Martinez Peria, Divya Kirti, and Alexander Copestake wrote the fintech note.

    The authors added that regulators should keep an eye out for the rise of dominant private providers and be ready to intervene to preserve a completely open, interoperable, and competitive system as the interoperable platform develops and additional providers join.

    According to the note, the system operator should ensure that its design decisions support the interoperable ecosystem’s health at every stage of development by consulting with existing and prospective private sector partners.

  • India’s GDP Growth Prediction for FY25 is Raised by 20 Basis Points to 7% by the IMF

    For fiscal year 2024–25 (FY25), the IMF increased India’s growth prediction by 20 basis points (BPS), bringing it up to 7% from 6.8%. The improvement in private consumption, especially in rural India, is the reason for the improvement in the growth projection, according to the International Monetary Fund’s (IMF) World Economic Outlook (WEO).

    The International Monetary Fund (IMF) revised its GDP growth prediction for India up from 6.5% in April to 6.8%. The UN’s international financial agency maintained its projection for the 2025–26 fiscal year (FY26) of 6.5% growth in the GDP of Asia’s third-largest economy.

    The International Monetary Fund also noted that its earlier projection for global economic growth in 2023 was 3.3% and that its current forecast for this year is 3.2%, both of which are unimpressive. Prior to the pandemic disrupting economic activity in 2019, global growth averaged 3.8% annually.

    Optimism for Global Growth Curbed; Downgraded US Projection

    As a result of slowing US activity and a dropping out in Europe, the world economy is expected to have modest growth in the coming two years. The International Monetary Fund has issued a warning about the slowing down fight against inflation, which could lead to a postponement of interest rate cuts and the maintenance of strong dollar pressure on emerging countries.

    Although it increased its 2025 prediction by 0.1 percentage point to 3.3 percent, the International Monetary Fund maintained its 2024 forecast of 3.2% global real GDP growth unchanged from April. Forecasts fall short of preventing growth from plunging into “the tepid twenties,” as warned by IMF managing director Kristalina Georgieva.

    Inflation is predicted to continue falling globally, from 6.7% in 2023 to 5.9% this year and 4.4% in 2025, after spiking to 8.7% in 2022 due to the fast recovery of the global economy from the pandemic recession. As a result of the first quarter’s disappointing performance, the International Monetary Fund lowered its growth prediction for the United States for this year from 2.7% to 2.6%.

    Service prices stayed high due to wage growth in the labor-intensive sector, and the International Monetary Fund (IMF) cautioned that inflation could rise in the near future due to increased costs of imported goods caused by rekindled trade and geopolitical tensions.

    GDP Projections for India and China

    According to official statistics, India’s GDP expanded by 8.2% in FY24. Both 2022–23 and 2021–22 saw economic growth of 7.2% and 8.7%, respectively. During its most recent monetary policy meeting, the Reserve Bank of India (RBI) increased its GDP prediction for FY25 from 7% to 7.2%.

    This year, the International Monetary Fund raised its growth prediction for China to 5% from 4.6% in April, although it fell short of 5.2% in 2023, in part due to a spike in Chinese exports in early 2024.

    Prior to the release of Monday’s (July 15, 2024) data, the world’s second-largest economy—China—had expanded at a slower-than-expected 4.7% annual rate from April through June, down from 5.3% in the first three months of the year. This was before the IMF prediction was made public.

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  • How Oil-Rich Economies Now Switching Towards Sustainability?

    The Middle East or the Gulf region has been basking on the oil-rich economy for ages. Since the discovery of oil (around 1908) in the region, the entire province has gone rags to riches. This development did not happen over the night as the first motor vehicles didn’t roll off the assembly line until 1908. There was a dearth of vehicles on the highway. Many ships and power stations used coal. The Middle East’s transportation, water, and sewage infrastructure were severely lacking or nonexistent in 1945. Many roads were barely dirt trails, and there were no deep sea ports for ships to offload their cargo. Many Middle Eastern nations were able to afford better infrastructure thanks to the rising demand for oil. Because of hundreds of engineering projects that were completed in the 1950s and 1960s, entire populations’ lives were changed. This was reminiscent of the work done in the 19th century by British engineers known as the Victorians. But things are changing again now that everyone is aware that the globe will quickly reach day zero if oil consumption continues at its current rate. The whole globe is on the lookout for long-term alternatives to oil in order to fight this trend. The Middle Eastern countries are likewise racing to be the first to achieve a sustainable and environmentally friendly economy.

    The oil and gas industry is seeking cleantech innovations to help them transition to the energy of the future, as governments around the world are aiming for reduced carbon emissions and a larger share of renewables in their energy mix. According to a report by the International Monetary Fund (IMF), an organization that works to achieve sustainable growth and prosperity for all of its 190 member countries, It seems like major economies are dead set on finding alternatives to fossil fuels, and in response, major automakers have pledged to switch from gas-powered to electric vehicles in the not-too-distant future. An unstable adjustment may be in store for oil-dependent economies as a result of this change, which will bring the oil market in line with climate goals but may have far-reaching consequences that extend beyond their boundaries.

    Mordor Intelligence projects a renewable energy industry in the Middle East with a yearly growth of 13.43% from 2023–2028. The use of more renewable energy sources is the goal of multiple government programmes. One example is the goal of the United Arab Emirates (UAE) to have half of its energy come from renewable sources by the year 2050.

    MENA Region All Up For Energy Storage Race
    The Domestic Impact Of The Climate Catastrophe Is Substantial
    Diversification Will Come With A Price Tag

    Where the Black Gold Flows: Top 10 Oil-Rich Countries

    MENA Region All Up For Energy Storage Race

    The magnitude of the energy revolution necessitates massive quantities of raw materials such as copper, lithium, nickel, graphite, and others. Electric cars, wind turbines, solar panels, batteries, and other vital technologies that are reducing our reliance on fossil fuels need materials extracted from the Earth’s core.

    Worldwide, nations are grappling with the issue of the supply of essential resources for the energy transition being woefully inadequate in comparison to the expected demand. The World Bank’s Climate-Smart Mining team predicts that the demand for lithium, cobalt, and graphite will climb by 500%, while the demand for nickel and copper will increase by 100% and 7%, respectively.

    The energy system transformation is a worldwide undertaking. Substantially important materials for decarbonisation will come from Africa. Whatever the case may be, interest in potential new mining sites is on the rise due to the global quest for zero pollution.

    Starting in western France and continuing eastward through the Middle East and “Daylighting” in Malaysia, the Tethyan mineral belt spans two continents and 33 nations, providing a geological basis. The area is rich in base metals. Regardless, a lot of it has been under-investigated thus far, which makes it perfect for discovering anything new.

    According to Quayle Resources’ MD Darryn Quayle,  “The Belt” is a mostly uncharted region of the earth, in contrast to mining zones in Africa and the Rockies. Our research, however, points to the existence of substantial underground reserves of energy transition essentials like copper and lithium.

    Leading Oil-Producing Countries Worldwide
    Leading Oil-Producing Countries Worldwide

    The Domestic Impact Of The Climate Catastrophe Is Substantial

    As reported by Deutsche Welle, Germany’s international broadcaster, keeping oil exports going will bring substantial money for the region, but it might endanger its very survival. Rising global temperatures are an inevitable consequence of other nations’ continued use of fossil fuels sourced by Saudi Arabia and its neighbours. Particularly hard hit will be the Gulf region.

    Assuming a 1.5 °C (2.7 °F) increase on a worldwide scale by 2050, the Gulf region could see a 4 °C increase. Already, the area has experienced heat waves with temperatures above 50 degrees Celsius, and the average temperatures are significantly higher than the global average.

    In certain climate change scenarios, the Gulf’s average summer maximum temperatures will surpass what is considered survivable. Dust storms will become more intense as a result of planetary heating, and low-lying regions may be impacted by higher sea levels.

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    Diversification Will Come With A Price Tag

    You should know that the money tap will be turned off eventually. There are plans to develop new sources of income because the International Monetary Fund has warned that the region’s treasuries would be emptied in fifteen years due to falling oil demand.

    The Saudi government is putting its money into green hydrogen production and, in tandem with the United Arab Emirates, is establishing a renewable energy industry to produce commodities like aluminium. Less environmentally friendly, it is also beginning to produce plastic and petrochemicals using its hydrocarbons.

    There has been a lot of talk about the enormous economic potential of exporting solar power. Solar panels installed on one square metre of land in a Gulf country might replace 1.1 barrels of oil in annual energy production.

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    FAQs

    What is the Tethyan mineral belt, and how is it relevant?

    • This belt stretches from western France to Southeast Asia and is rich in base metals.
    • It’s a largely unexplored region with potential for new discoveries of minerals needed for the energy transition.

    What are the challenges of the energy transition for the Middle East?

    • The region faces extreme heat and water scarcity, which could be exacerbated by climate change.
    • A rapid shift away from oil could cause economic instability.

    Why is the Middle East looking to move away from oil?

    • The global push for reduced carbon emissions and a shift towards renewable energy sources is putting pressure on the Middle East to diversify its economy.
    • Declining demand for oil due to the rise of electric vehicles and alternative energy sources could lead to financial difficulties for oil-dependent economies.