Trump said he doesn't see a recession after the bond market spooked investors and the Dow suffered its worst day of the year last week.Marketsread more
Americans now say they approve of free trade by 64%-27%, a margin of better than two to one. That's up from 57%-37% early in Trump's presidency, and 51%-41% near the end of...Politicsread more
Stocks in Asia edged up Monday morning as U.S. Treasury yields bounced higher after plunging last week which sent markets into a panic.Asia Marketsread more
The problem with tanking equities lies elsewhere, writes Michael Ivanovitch, because traders see no end to America's unfolding trade disputes with Europe and China.World Economyread more
Beijing wants to use reforms to support a slowing economy.China Marketsread more
Trump said Cook made a "good case" that it would be difficult for Apple to pay tariffs, when Samsung does not face the same hurdle because much of its manufacturing is in...Technologyread more
The yield on the benchmark 10-year Treasury note briefly fell below the 2-year rate on Wednesday, a phenomenon in the bond market known as yield curve inversion, which is...Marketsread more
Despite aggressive strides, Waymo needs one thing before their self-driving cars become a seriously useful transportation system: people. We talked to the ones closest to it.Technologyread more
The hearing will now begin next Monday to allow time for the completion of a previous trial that revolves around former 1MDB unit SRC International, a Kuala Lumpur High Court...Asia Newsread more
"I don't want to do business at all because it is a national security threat," Trump told reporters.Technologyread more
Trump's is due to visit Copenhagen early next month, when the Arctic will be on the agenda in meetings.Europe Politicsread more
The Indian government announced two important fuel reforms – a deregulation of diesel prices and a hike in natural gas prices – over the weekend, a signal of Prime Minister Narendra Modi's commitment to tough economic reforms.
The price of widely-used diesel was deregulated effective midnight of October 18, while natural gas prices will be raised to $5.61 per million metric British thermal unit from $4.20 on November 1, and revised every six months.
So what are the implications of the fuel reforms for Asia's third largest economy?
Controlling the fiscal deficit
Freeing diesel prices from state controls and pegging them to international rates effectively eliminates the subsidy on fuel. This will lower the government's subsidy bill by around 0.3-0.4 percent of gross domestic product (GDP), DBS estimates, and shield the government's balance sheet from volatility in global crude prices.
The government's fuel subsidy bill was about $11 billion in the year ended in March, around half of which was for diesel. Diesel accounts for around 44 percent of total fuel consumed in the country.
"The fuel reforms bode well for the fiscal outlook," said Sonal Varma, chief India economist at Nomura, noting that with both diesel and petrol prices now market-determined, the government will subsidize only liquefied petroleum gas (LPG) and kerosene.
India's fiscal deficit was 3.98 trillion rupees ($64.4 billion) during April-August, or about 74.9 percent of the full-year target.
Higher natural gas prices are set to encourage investment into the gas sector, say analysts.
Artificially low prices have discouraged investment in developing production capacity, including the building of pipelines and terminals for more expensive liquid natural gas.
There have been growing calls by producers reeling from high production costs to hike natural gas prices, said Radhika Rao, economist at DBS. "With higher prices, one can expect more investment interest in that field," she said.
Inflation implications – not much
The fuel reforms will have a marginal impact on inflation as the consumer price index (CPI) basket is predominantly made up of food and services, says Rao. The CPI is the key measure of inflation for the Reserve Bank of India.
Nevertheless, higher natural gas prices could push up the cost of cooking gas and compressed natural gas used by buses, taxis and other vehicles.
Finance Minister Arun Jaitley said the central government will urge state governments to cut local taxes to soften the impact of this.
While the recent decline in global crude prices along with the deregulation is positive for the economy, there's a caveat.
"Any sharp rebound in global crude prices will filter through as a negative trade shock, especially as petrol and diesel prices are now market-determined," said Rao.
"Such an event will truly test the government's resolve in keeping prices market-linked and not reviving state interference."