Questions and Answers
What has been the trend in fiscal policy stance regarding capital expenditure as a percentage of GDP?
Which fiscal year showed the highest gross fiscal deficit as a percentage of GDP?
What is indicated about the capital expenditure trend in relation to GDP from FY20 to FY24?
Which of the following best describes the relationship between gross fiscal deficit and GDP as seen from the figures?
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Which fiscal year represents the lowest capital expenditure percentage among the options provided?
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How have government economic policies influenced the fiscal deficit trend in recent years?
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In the context of fiscal deficit, what can be inferred about the country's economic health?
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Considering the information, what is one of the major implications of a rising fiscal deficit?
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What can be deduced about capital expenditure strategies from FY20 to FY24?
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Which fiscal year indicated a decrease in capital expenditure as a percentage of GDP?
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What was the percentage decrease in global merchandise trade in 2023?
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What was the growth rate of world output in 2023 compared to 2022?
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By how much did foreign direct investment to developing economies decline in 2023?
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Which of the following sectors experienced a trade volume contraction in 2023?
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What was the projected change in world trade volume for goods and services for 2024?
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Which region's economies saw a decrease in growth from 2022 to 2023?
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What was the growth rate of world consumer prices in 2023?
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Which commodity experienced the largest price drop in 2023?
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What was the global growth rate in 2023?
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Which factors contributed to the resilience of global growth in 2023?
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How did central banks influence the economic landscape in 2023?
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What challenge did central banks face regarding inflation in 2023?
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Which region is projected to experience a considerable decline in inflation in 2024?
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What contributed to the avoidance of a feared global recession in 2023?
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What was the primary reason for volatility in financial markets in 2023?
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What trend is projected regarding commodity prices in 2024?
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Study Notes
Global Trade and Investment Trends
- Global merchandise trade contracted by 1.2% in 2023; combined growth in goods and services was only 0.8%.
- IMF reported new trade restrictions: approximately 3,200 in 2022 and 3,000 in 2023.
- Foreign direct investment in developing economies fell by 9% in 2023 according to UNCTAD.
- Geo-economic fragmentation is impacting trade and investment growth.
Global Economic Indicators (Growth Rates)
- World output growth was 3.5% in 2022, decreased to 3.3% in 2023, and projected at 3.2% in 2024.
- Advanced economies experienced a significant slowdown, with growth declining from 2.6% in 2022 to 1.7% in both 2023 and 2024.
- Emerging markets and developing economies saw growth rise from 4.1% in 2022 to 4.4% in 2023, with a slight dip to 4.3% projected for 2024.
- World trade volume for goods and services significantly decreased from 5.6% growth in 2022 to only 0.8% in 2023; expected recovery to 3.1% in 2024.
- Consumer prices globally rose from 8.7% in 2022 to 6.7% in 2023, with forecasts of a decline to 5.9% in 2024.
Commodity Price Fluctuations
- Oil prices dropped by 16.4% in 2023, whereas non-oil commodity prices declined by 5.7%.
- Forecasts anticipate a modest recovery in commodity prices in 2024.
Fiscal and Monetary Policies
- Global growth showed resilience against high interest rates, avoiding a feared recession linked to synchronized monetary tightening.
- Factors contributing to resilience include labor force participation improvement, supply chain easing, and declining global food prices.
- Headline inflation decreased from 2022 peaks but remained above central bank targets, complicating disinflation efforts.
- Financial markets responded to changes in monetary policy expectations, contributing to volatility in yields and term premia.
Future Projections
- IMF predicts a marked decline in inflation for advanced economies in 2024, while emerging markets may experience persistent inflation challenges.
- Commodity price dynamics are expected to slightly reverse in 2024, following declines in 2023.
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Description
This quiz covers the fiscal policy stance of India for the financial year 2024, focusing on consolidation and capital expenditure. Analyze trends in gross fiscal deficits as they relate to GDP percentages. Test your knowledge on key economic policies and their implications for the nation.