Apparel exports remained flat at USD 907 million in October 2012 compared to the same period last fiscal due to sluggish demand in the European and the US markets. In October last year, garments exports stood at USD 914 million, according to the data provided by the Apparel Export Promotion Council (AEPC).

“Buyers in markets like Western Europe and USA are not placing more orders due to the economic turbulence in their economies,” AEPC Chairman A Sakthivel said. Also, he said, there is a stiff competition from neigbouring countries like Vietnam and Bangladesh in the US market and from Turkey in EU market. During 2011-12 fiscal, the US and Europe together accounted for over 65 per cent of India’s total apparel exports which stood at USD 14 billion.

Further, Sakthivel said, rising wage rates, hike in oil prices and raw-material cost are factors affecting exporters’ profitability. During April-October 2012 period, garments exports dropped by 9.1 per cent to USD 7.1 billion compared to the corresponding period last year. To reduce dependence on western markets, exporters are marketing their products by participating in trade exhibitions and holding road shows in new markets like Latin America, Japan, Israel, Russia and South Africa.

Terming the second quarter economic growth rate of 5.3 per centas “below expectations”, finance minister P Chidambaram said it was mainly due to scanty rainfall and poor showing by the manufacturing sector. “Overall, the growth rate is below our expectations,” Chidambaram said in a statement after the official data showed that GDP growth fell to 5.3 per cent in July-September period.

The gross domestic product (GDP) had expanded by 6.7 per cent in the same period of last fiscal. In the April-June period of 2012-13, the economic growth rate was 5.5 per cent. During the three-month period ended September 30 this year, farm sector output expanded by just 1.2 per cent, against 3.1 per cent in the same period last year. “The reduction in growth in agriculture and allied sectors has been on account of rainfall being lower than normal, particularly in June-July. The impact on the khariff crop has pulled down the growth rate,” Chidambaram said.

He said the industry growth has been lower mainly due to poor show by manufacturing, which grew marginally by 0.8 per cent, against 2.9 per cent in the same period of 2011-12. Growth rate of services sector, including insurance and real estate, stood at 9.4 per cent in the second quarter, against 9.9 per cent recorded in same quarter last fiscal. “The growth rate of services sector showed some improvement in Q2 of 2012-13 vis-a-vis the Q1, it still remains below the trend level,” Chidambaram said.

The economic growth in the first six months (April-September) of this financial year (2012-13) is 5.4 per cent, lower than 7.3 per cent clocked in the year-ago period.

Spain is likely to remain in deep recession until the end of next year as “painfully high” unemployment and the need to shore up its banks weigh heavily on the economy, according to the Organisation for Economic Co-operation and Development (OECD).

The country was facing the prospect of becoming the next euro zone country to be bailed out by international creditors earlier this year. Market concerns have receded after the announcement of a new European Central Bank (ECB) bond-buying plan, and the Spanish government has been reluctant to ask for a bailout. Worries that Catalonia, Spain’s richest states, might break away have also receded after elections earlier this week.

“The prospect of an immediate recovery remains remote as deleveraging of the private sector still has a long way to go while the feedback loop between government finances and the banking sector remains strong, notwithstanding the loan of up to 100 billion euros from the euro area governments to recapitalize the banks,” the OECD warned in its report.

“This feedback loop must be broken.”

The OECD believes that recapitalizing the country’s “viable” banks and shutting down its “non-viable” banks, which are struggling after a property bubble burst, should be the first priority for the Spanish government. It warned that the stabilization provided by the ECB would only be “temporary.”

On Wednesday, the European Union gave the go-ahead for a major overhaul of four Spanish banks, including USD 48 billion in recapitalization funds and losses for bondholders.

Global food prices remained stable, though close to 2008 record levels, the World Bank said on Thursday, as it warned that a “new norm” of costlier food should be avoided to prevent an increase in hunger and malnutrition in the world’s poorer regions.

In an update of its quarterly “Food Price Watch” report, the World Bank said the absence of “panic policies,” such as food export restrictions, had helped stabilize commodity prices since price spikes in July.

“Even as the world seems to have averted a global food price crisis, a growing sense of a ‘new norm’ of high and volatile prices seems to be consolidating,” the World Bank said. “Simply put, the world cannot afford to get used to or be complacent with high and volatile food prices.”

The World Bank food price index shows that while prices have stabilized they are 7 percent higher than a year ago.

In particular, grains are 12 percent higher than a year ago and close to the all-time high set during a global food price crisis in 2008, when food riots broke out in some countries in Asia and Africa.

The worst droughts in more than half a century in the United States corn belt and food basket regions of the Black Sea pushed up the global prices of wheat and maize this year.

The White House is seeking USD 1.6 trillion in tax increases up front, as well as USD 50 billion in additional stimulus spending, as part of any “fiscal cliff” deal, Republican aides said Thursday as talks aimed at averting the economy-rattling cliff turned testy.

President Barack Obama also wants a permanent increase in the federal debt ceiling, a one-year expansion of jobless benefits and an extension of the payroll tax credit, these aides said.

The latest proposals were presented by Treasury Secretary Timothy Geithner, who visited Capitol Hill Thursday to discuss the fiscal cliff with leaders of both parties.

After Geithner’s visit, Republican House Speaker John Boehner publicly lambasted the Obama administration, saying “the White House has to get serious.”

Boehner added, “No substantive progress has been made between the White House and the House” in the two weeks since Obama welcomed congressional leaders at the White House.

“I was hopeful we’d see a specific plan for cutting spending,” he said, but added that he “remained hopeful” a deal can be reached before the Dec. 31 deadline. “Jobs are on the line, the American economy is on the line, and this is a moment for adult leadership,” Boehner added.

The White House proposals are almost exactly what was in the president’s budget proposal last February, Republican aides said.

Democrats swiftly countered that any holdup was the fault of Republicans who refuse to accept Obama’s campaign-long call to raise tax rates on upper incomes.

At the White House, presidential press secretary Jay Carney said, “There can be no deal without rates on top earners going up.” Taking a confrontational, at times sarcastic tone, he said, “This should not be news to anyone on Capitol Hill. It is certainly not news to anyone in America who was not in a coma during the campaign season.”

With barely a month remaining until a year-end deadline, the hardening of positions seemed more likely to mark a transition into hard bargaining rather than signal an end to efforts to achieve a compromise on the first post-election challenge of divided government.

Boehner suggested as much when one reporter asked if his comments meant he was breaking off talks with the White House and congressional Democrats.

“No, no, no. Stop,” he quickly answered.

The plan calls for USD 1.6 trillion in new tax revenue over the coming decade, extending the 2 percentage point payroll tax deduction or something comparable to it and USD 50 billion in stimulus spending on infrastructure projects.

Gross domestic product (GDP) has slowed down to 5.3 percent in July- September versus 5.5 percent in last quarter and 6.7 percent in corresponding quarter last fiscal.

The manufacturing sector grew an annual 0.8 per cent during the quarter while agriculture output rose 1.2 per cent.  However, growth gross fixed capital formation was up 4% year-on-year.

Mining and quarrying sector, however, showed some improvement and recorded a growth of 1.9 per cent during the quarter, as against a contraction of 5.4 per cent in the second quarter of 2011-12.

The economic growth in the first six month of this fiscal (April-September) is 5.4 per cent, lower than 7.3 per cent growth clocked in the year-ago period.

In the July-September quarter, trade, hotels, transport and communications segment also witnessed lower pace of growth at 5.5 per cent compared to 9.5 per cent expansion in the same quarter in year ago.

Here’s how other sectors stack up:

Manufacturing growth at 0.8% vs 2.9% (YoY)

Agri sector growth at 1.2% vs 3.1% (YoY)
Mining sector growth at 1.9% vs -5.4% (YoY)
Construction sector growth at 6.7% vs 6.3% (YoY)
Service sector growth at 7.2% vs 8.8% (YoY)
Industry growth at 2.8% vs 3.7% (YoY)
Gross fixed capital formation up 4% (YoY)