found guilty of 34 counts in his hush money trial, a verdict that could reshape the u.s. political landscape ahead of the presidential election. china's factory activity unexpectedly shrinking this month. a warning signal from the case after driving the economic recovery. plus, slides as investors worry about what kind of coalition may end up governing south africa. we got an election update live from johannesburg. and of course, we have a great lineup of guests joining us here this hour at the shangri-la dialogue front in singapore. u.s.-china relations, this on the back of rising geopolitical tensions in the south china sea in the taiwan straits as well, front and center. that handshake expected at 1:00 p.m. local time with the defense chiefs in both u.s. and china are expected to make. what is the significance of

that? we will bring your commentary and assessment very shortly. of course, the nsa director will be our guest for an assessment of relations between the two sides. let's get you to markets. it is about weaker than anticipated data out of the u.s.. front and center as well, the pc print that's coming out. >> yeah, i think it is a really interesting set up for asian markets today. think about how the world's two economic powerhouses are showing data that is coming in softer. you saw how the u.s. gdp print showed that slowing, no thanks to a bit of a softer consumer spending picture. then we got those china pmi's comedy factory activity unexpectedly shrinking -- china pmi's, the factory activity unexpectedly shrinking. we initially saw a softer

dollar, which helped some of the risk appetite among asia-pacific assets, and the stocks are mostly running higher. we also see the dollar picking up now, so that might be putting some of that pressure on the onshore/offshore yuan. we also got tokyo cpi numbers earlier today, and it shows a pickup, pointing to potentially an acceleration in the nationwide trend when that data drops next month. perhaps making the case for the boj to mold those rate hikes. still see and that pressure coming through on japanese bonds. as i say, we were looking really closely at the china pmi's as well, the unexpected contraction in factory activity. why is this important? because there was expansion for the past two months, and we were actually seeing that sector really supporting the recovery in china, so this is raising a bit of eyebrows, and it is also

the biggest miss versus estimates in more than a year. these are the sub-indices that are not helping things along. take a look at the output, the new order slowing coming there for those manufacturers in china . another concern as well from those trade tensions, which may make it a bit trickier for them as well. haslinda: we thank you so much for that update. the shangri-la dialogue will be the first in-person meeting between u.s. and chinese defense chiefs since china named a new defense minister. let's discuss expectations for this meeting and simmering superpower tensions, we turn to the director of the u.s. national security agency and commander of the u.s. cyber command. general, good to have you with us. a lot of focus is on the handshake between the two defense chiefs. can we get more than just a handshake? >> first, thank you very much for having me.

it is an honor to be part of the shangri-la dialogue in our opportunity to meet with any number of colleagues throughout the region. as we think about today from our organizations, from the national security agency to cyber command, really looking at two things. one is, what are the threats within the region. what are the tensions and what is causing them, and also, what are the cyber risks. when you look at current tensions, what we would like to be able to ensure is peace and stability in the taiwan straits in the south china sea, and increasingly, we see china's actions to be threatening in those areas. the activities around taiwan over the last week also threats to the philippines as well as vietnam and japan, so those are areas from our perspective -- we inform those threats to our policy makers to allow them to have a dialogue that is informed by the facts and the current environment. haslinda: what is the key message the u.s. would be sending china as this dialogue?

>> from my perspective is what are the current activities, what do they look like. the other area is the things we see in the cyberspace domain, so we have done extensive reporting, both inside our government and then publicly about some of china's actions, particularly as it relates to critical infrastructure in the united states and also the theft of intellectual property globally, so we want to ensure that all of our policymakers understand those actions, so as they engage in -- in dialogue, it is sure that they are built off of what is the best information out there. haslinda: we know military ties resumed about a year ago. how do you assess relations n are they better than a year ago given how aggressive china has been in areas like the south china sea and the taiwan strait? >> we think any time that there

is communication is good because from our perspective, we want to ensure that there is a clarity in terms of the areas we are discussing informed by the current sets of activities and how we each perceive them. from the perspective that there's increased communication is certainly a positive, but we also see areas that we would be concerned about. haslinda: we see a lot of aggression in the south china sea. we have had the president of the philippines pushing back, saying that he wants to normalize relations, get relations back on an even keel. good developments in the south china sea -- could developments in the south china sea derail efforts to normalize relations between the two sides? >> i differ that went to policymakers. we are ensuring that we are working with partners in the region so we are advancing their

capacity and understanding. we work closely with u.s. into pacific command in their work to ensure we are able to provide stability in the region to our own military operations, if that's through partnership and exercise, but also our ability to communicate those threats not only to our policymakers but to our allies and our partners. haslinda co. that we talk about how volatility around the region is rising, not just the asia-pacific area -- haslinda: we talk about how volatility around the region is rising. how is the u.s. looking at escalating tension in the world today? some say perhaps it is a case of a weakened u.s. that is leading to all of this. >> i deal with each of our partners in the region. just like in the indo pacific, we work with the indo pacific commander and he has his resources to be able to focus on the threats. we work very closely with the

allied commander in europe and the european commander, and we are ensuring that he understands threat. he has forces aligned to him, and he has a very strong partnership with the ukrainians to enable their defense from the unlawful invasion from russia. similarly, as we saw over the events of the last month, the united states has had the ability to assist israel in its defense, particularly from attacks directly from iran, so i think we have aligned ourselves with organizations that are globally focused. we have aligned resources to be able to handle the priorities policymakers have given us. haslinda: but what are the red lines? a lot of people have been asking where the red lines are. as the u.s. clear on where the red are or is that too big price to be revealing today? >> from my perspective, policymakers said whichever lines that we want to do. our job is to be able to do two

things, be able to inform from an intelligence perspective what is happening and also to give options to policymakers, if those are things we see as potential operations from a military perspective or informing how other activities are born, like humanitarian aid and things like that so policymakers have the best information from an intelligence perspective and operationally as they make decisions on any of those areas. haslinda: i just want to get a sense of u.s. thinking. if you take the south china sea, for instance, what would it take to trigger the mutual defense agreement? >> that one is an area really outside of my purview. haslinda: what is your understanding of it? quixotic requirements from our nation's leadership and our military leadership, and they give us a clear understanding of what are the things they need to know so it can inform any decision-making. the other areas that i think we

also assist in is the ability to build partnerships so that we can avoid getting to a crisis. i think that is an area that an environment like this is very helpful. with 40 other nations where we can talk about these common issues and how we avoid crisis through our close partnerships, through our exercise and through our opportunities to open dialogues. haslinda: would you say the u.s. is now closer to its allies as well as its partners in this part of the world? >> absolutely. haslinda: hang tight. the u.s. national security director is sticking around. we are coming to you live from the shangri-la dialogue. still ahead this hour, markets await india's first quarter gdp numbers. we discussed the state of the economy with citi's nda economist. keep it with us. this is bloomberg. ♪

>> this was a disgrace. this was a rigged trial by a conflicted judge who is corrupt. it's a rigged trial, a disgrace. they would not give us a venue change. we were at 5% or 6% in this district in this area. this was a rigged, disgraceful trial. the real verdict is going to be november 5 by the people. >> while this defendant may be unlike any other in american history, we arrived at this trial and ultimately today at this verdict in the same manner as every other case that comes through the courtroom doors, by following the facts and the law

and doing so without fear or favor. haslinda: donald trump as well as manhattan district attorney alvin bragg reacting to the former president's conviction on all 34 charges he faced over hush-money payments to porn star stormy daniels. trump now carries a tag unlike that of any other presidential hopeful in u.s. history, that of convicted felon. let's get more with bloomberg's derek wahlberg. will be tagged affect his election chances? -- willie tag -- will the tag affect his election chances? >> it is a landmark day. this is the first time we have had a former president of the united states convicted of charges like this. trump was found guilty on all of

the charges, and there's really not a precedent for this in the past. you sort of sit there and look at this as a national election in a deeply divided country and say, a lot of this seems to have been baked in. republicans overwhelmingly, near unanimously are sticking by their man, staying with trump, even people who have criticized trump in the past like senate republican leader mitch mcconnell, coming out and saying that the charges should never have been brought. there is a high degree of unanimity on the republican side of this. you could even suggest based on some donation data, some early indications, that there may be more enthusiasm on the republican side. haslinda: you've got to wonder what trump's next move might be. >> i think we are all bracing for an appeal in this case. i do think that they are looking

for a way to appeal. that cannot happen until after the sentencing, which will be in a couple more weeks. i think that politically, you are going to see the trump campaign continue to do what it has been doing and make the case that trump has been wronged somehow in this process. one of the key things i'm watching for is how this plays with independent voters. as i said, this is about a coin flip election. worst case scenario, you figure trump has a 50% chance of winning right now. americans were polled asking if trump got a fair deal in this case. by a 10-point margin, 37 or thereabouts, said that he did. by a 27-point margin, they say he is guilty. if you look at independent voters, that is really where this will be important, because this is not an overall first

pass at the post kind of election where the person with the highest number of votes wins , right? the u.s. is different for a presidential election. it's a compendium of state votes in the electoral college, so when you look at some of these swing states -- wisconsin, michigan, pennsylvania -- you are really talking about just a couple of boats. -- a couple of votes. i always have in my mind one of the former campaign heads of al franken's race when he became a senator. he won that by just over 300 votes. i asked what was the difference, and she said in a race of that margin, everything can be the difference, and that is the case in swing state after swing state across america. it may be very well that tight. anything can make a difference. haslinda: we thank you so much for your assessment today. of course, we will continue to

track developments. tonight's big take is also about donald trump. find out what wall street billionaires are rushing to throw their weight behind the former u.s. president even after his guilty verdict. subscribers can read about it on the terminal. our big take is your function. the director of the u.s. national security agency and commander of the u.s. cyber command is still with us. good to have you with us. we had trump being convicted of all 34 counts, but according to some polls, he has a chance still of winning the presidential race. what might a trump 2.0 main formulations in southeast asia? >> this is an area that i know are not qualified to discuss in terms of the department of defense. we are an apolitical

organization. as i look forward, the next thing we are focused on is our election defense. as we think about ensuring that the role that both nsa and cyber command play, to be able to support our domestic agencies of homeland security and our fbi, with any threats to our election from any foreign interference, so it is a mission we work very closely to consider both cyber threats and then threats that could occur in the information environment, and that is really the area that we are focused on. haslinda: before i pick up on cyber threats, let's talk about disinformation and misinformation that some say trump himself is responsible for. how do you view that? >> we are focused on foreign threats. as an intelligence agency in the united states, we do not do any work inside the united states. we are focused on foreign threats, so we are looking to see if there is any nationstate

that will attempt to influence our election. haslinda: has that cyber threat increase? >> from a cyber perspective, we watch that closely. in terms of what it looks like in today's environment, certainly there have been increasing cyber threats. one area in particular has been in ransomware. that has been a global impact of attempting to be able to use ransomware to get money from companies or to extort money from companies by gaining access to information. that is one of those threats. the others are from nationstates, and we have done a significant amount of reporting, increasingly unclassified, publicly available reporting, that articulate these threats, and one of those is really around how china is targeting critical infrastructure, and our goal is to be able to share that information as widely as we can with partners, with industry, so that we can now collectively

defend against those type of threats that would impact not just the united states but our partners in this region in terms of very similar cyber threats that they face. haslinda: we know it is a huge year for elections. we have one in south africa. the accounting is happening, like, right now. i'm headed to india for the results of the election. how do you see how countries are protecting themselves? >> in general, it is about education, so it starts there. where do people go to get their information that they validate is true? ensuring that we are more educated on how to consume information is a starting point, and that is at a national level. from the particular identification of threats, our department of state puts out an annual report that we work closely with them on. it is called pillars of disinformation. that report lays out threats by nation as to the techniques they

do, the manner in which they do disinformation, and it allows anyone from any other nation to pick that up to use as a start point and then potential area we can collaborate with them on as to what these threats look like and what it poses potentially for an election hour any other issue that is happening within a nation. haslinda: linked to that are semiconductors. we know the u.s. is coming down on china's access to it and now perhaps in the middle east as well. how are you assessing that now? >> from our perspective, our goal is to understand a number of things. one is -- what is the current state of the technology? how do we communicate within the government and understand in this case as our government is considered withholding that capability from china, what is their current status? what is there intended use for that technology? how we informed that discussion allows policymakers to be able to make a decision that is

consistent with our laws and our policy and the overall objectives to ensure free and fair trade and ensure we are also able to be able to have a conversation around the facts and those particular technologies that are most important. haslinda: in the early days of the ukraine war, it managed to fight off cyberattacks to its infrastructure. how has that threat evolved three years on? >> it continues and ukraine has been very resilient. i think that is one of the lessons that any nation can take away from how ukraine has approached this with many partners. first and foremost, they thought about resilience, both in how they defended their own infrastructure, how they partnered with others to make the infrastructure more resilient, but also how they used cloud infrastructure to make themselves more resilient to attack, so i think that at the outset, key lesson learned was resilience. as it has evolved, we have also

seen how russia has approached this. they continue to use any means available to target ukraine as part of their unlawful invasion. areas that we see is them attempting to take information from ukraine to be able to use that against ukrainians in any number of ways. we continue to support european command as they do efforts with ukraine to help them secure their infrastructure, secure their data, and support them in any way consistent with u.s. policy. haslinda: we know the u.s. is working closely with ukraine to perhaps stop russia from tapping starlink. how is it going, how will it work? >> i think what we have seen is that any number of commercial providers in ukraine have been very resilient and have given ukraine options as they defend themselves. it is another lesson i think we take away, that from any nation, the number of options that are available in terms of ensuring

communication, in many cases, ensuring president zelenskyy was able to communicate to the world and also that we are enabling and defending and providing information that would allow any company to be able to take that information to ensure that they are defending. haslinda: we talk about how the u.s. is helping to build resilience. where is the weakest link? where needs help? >> one of the weakest that's one of the way i think about this is when nations ask for assistance. within cyber command, we do a series of operations where when they ask us, we will send a team of experts to them. we do a number of things together shoulder to shoulder. one of them is whatever network they identify that they are concerned about, we will work to identify are there vulnerabilities, and by their attempts at hacking the infrastructure that we can close? at different times, we will also expose that activity because it really does help others learn from that. i think first and foremost, the

number one threat are vulnerabilities that are latent in networks, and the ability for people to close their own vulnerabilities is one. the second is we are really seeing china be very aggressive, to use their industry to find those vulnerabilities, keep them private, and target them. that's why we are rapidly working with any number of nations to expose wherever we can what vulnerabilities exist in the systems and also chinese actions to take advantage of that. haslinda: all right, general, we have to leave it there. markets taking a breather, rising a little bit on the back of that unexpected data out of the u.s.. of course, that is pumping expectations that we might just see that rate cut from the fed this year. we are keeping a watch on the dollar and how that is impacting in particular currencies in this part of the world. we are seeing a lot of pressure

on the chinese yuan, of course, and how the yen has been under pressure as well. keep it here with us. this is bloomberg. ♪ her uncle's unhappy. i'm sensing an underlying issue.

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haslinda: welcome back to "bloomberg markets: asia." we are seeing chinese markets just about had to lunch, so let's look at what we are seeing on the mainland. today is really dominated by the data that we got, those china pmi's showing that unexpected

contraction in factory activity, a sector that has been driving the recovery of the chinese economy, so that is raising some concerns about how uneven things are looking, but if you take a look at the performance across assets, it looks like a pretty muted one. the hang seng is rising in line with its other asian benchmark counterparts, and even on the yen, it looks pretty flat against the greenback. victor torino from seb offers this perspective. she says there is some optimism that the stabilization in the property sector will help offset any pullback in manufacturing, and as long as those u.s. yields remain cap, dollar china can cap some of the upside. that's what we are seeing across assets in china. in japan, we have markets coming back from the lunch break. the nikkei has been pretty boy and for much of the session, and this is against the backdrop of

that data coming out of the u.s. showing that slowing in the u.s. gdp, raising hopes of fed rate cuts, and that seems to be helping some of the risk appetite. the bank stocks are the ones helping to lift the indices, the, as we see those higher yields in japan. something else to note as well is the likes of tokyo electron and laser tech, those shares are actually dragging the benchmark, given the service sales coming in. they did not really impress investors, so that is what we are watching. as we talked about earlier in the program, we did get those tokyo cpi numbers, and if you look under the hood, even though there was a pickup that points to an acceleration on the nationwide print that is due next month, supporting the case for the boj to mold those rate hikes, the pickup was largely due -- and this is something our bloomberg colleagues have flagged -- due to the renewable

energy surcharges. if you look under the hood, the picture looks a bit more mixed, but still, tokyo cpi trending in the right direction for the boj. haslinda: thank you. in the fx place, the south african rand is under pressure as investors fret over the outcome of the country's elections. a model developed by a state research agency suggests the anc could lose its parliamentary majority for the first time since it came to power three decades ago. our chief africa correspondent joins us live from south africa. set the scene for us. >> yeah, good morning. i am at the election center. it is still pretty early here, but, really, it has been quite a busy past 24 hours. as you mentioned, that government agency projection is projecting the anc could potentially drop below that 50%

majority that they have held for the past 30 years. right now, we are at about 15% of votes, of districts that have voted, that have been tallied, so we still have a ways to go, but the activity in the markets yesterday indicates that investors are now wondering what discussion talks will be potentially for coalition if that is the new era that the south african government is going to be entering in. you can see behind me, this is where we are paying very close attention. it has a number of the districts, all of the districts and the provinces that we are paying close attention to, and what we saw on thursday is the anc really struggling to gain support in the biggest provinces that we are paying close attention to.

we have seen former president jacob zuma's very newly formed party doing surprisingly well. the question now, though, is -- what does the rest of the day look like? especially as we pay close attention to how the most populous province -- what that looks like as we continue to get more and more votes counted? haslinda: you talk about how the anc probably underperformed its own expectations. what are the indications of that? >> right. the big question is -- if the anc does continue to stay below this threshold that many investors were saying was not there base case scenario, who then are they going to turn to to become partner with which to form a government? that is what they will need in order to elect a president for

his second and final term. what we have heard in the past, if it is the mk party, will they work together with the anc? we have heard from both parties that potentially that is not something they would do, other yesterday, we heard from a party spokesperson saying that they potentially would be open to that, and if not then -- if not then, would they turn to the main opposition party to form a government and move forward? it's going to be really interesting, the coalition talks, once we get more votes counted, how they are happening behind the scenes because over the past few months during this campaign trail, we have heard a number of these parties say that without a doubt, they will not work together, but in order for the anc to reelect the president, they will need partners if these projections hold further. haslinda: talk to us about the sentiment on the ground.

>> it is interesting. it has been over 24 hours since the votes started being counted, but still, people are saying it is a bit too early. a lot of the sentiment i would describe as being uncertain at this point in time just because we do not know what sort of tied up or partnership is going to look like. we have not yet heard from the president since we saw him voting in his hometown back on wednesday. we are trying to figure out, what are the discussions happening now? what could the government potentially look like, and how will they be able to address a lot of the issues that have been plaguing this economy? mainly -- namely, 33% unemployment. much of that affecting young people. we have an economy that has not grown as much as it should. projections are growth just over 1%. we have had electricity outages, port and rail infrastructure not

performing, so people are ready to see a government that is ready to do something, but if they will be able to do that is a big question. haslinda: great stuff. bloomberg's chief africa correspondent. we are going to take you back to the lion city with elections spanning from india to the u.s. this year. the implications of these democratic exercises ripple far beyond national borders. for more on the key themes facing the shangri-la dialogue, we are joined by the executive chairman of international institute for strategic studies, which convenes this defense summit. good to have you with us. how significant is the summit? coming at a time when geopolitical tensions are rising all around the world. >> as you say, in all three strategic theaters, the north american area where there is a war against ukraine, the greater middle east where there is this horrid struggle between israel and hamas, and here in the asia-pacific where one deals on

the brink attention almost on a day-to-day basis, this meeting that brings together so many defense minister's not only of the pacific but also from your north america and the middle east is very important. recall that two years ago, the prime minister of japan said at this dialogue, ukraine today could be asia tomorrow, and the defense minister's convene here will be trying to engage in defense diplomacy to prevent ukraine today from being asia tomorrow. haslinda: is there added importance given that we are seeing the biggest election year for the world? >> in some cases, the elections do not particularly matter. we have had a very important election in indonesia and we are very proud we have the president-elect speaking at the dialogue on saturday afternoon. we are very pleased that we have on friday evening, the president, the philippines giving their perspective from a small state facing challenges in the region.

whatever the results of the democratic elections in various countries, more institutional connection can be made between the various countries here in order to ensure the lines of communication are open and those valves are used, especially at times of military tension. haslinda: i guess they presented that perhaps it's difficult to get more than just a handshake for the cameras. how optimistic are you that this dialogue would perhaps generate more significant consequences? >> i think this year, it is very important that it is likely the u.s. secretary of defense will meet his opposite number, the defense minister of china. that would be the first face-to-face meeting in almost two years between a u.s. and chinese defense minister. what i hope they will discuss is trying to find ways in which the future commanders in china -- the idea would be to thicken out

the institutional arrangements for communication, so i think that will be very important, but we have seen so many miniature lateral arrangements being made between states who are trying to engage more outside powers in the region to ensure that while china speaks of a multipolar world, we don't find ourselves in asia in a unipolar asia. haslinda: china, of course, like you said, is looking for a world where her are more power centers than just the u.s. might we be headed that way anyway? we are seeing the increased significance of the middle power for instance. >> it's true that china wants to make certain it is the biggest resident power in the indo pacific. it would prefer the united states to be absent, but as it happens, a number of sc on countries -- a number of asean want the united states to keep its approach. they are finding arrangements amongst themselves to make life a little bit easier for them.

philippines in particular having signed about six or seven new defense agreements. haslinda: what are some of the major themes emerging for this particular summit? >> i think maritime security as always is important. there are increased concerns about tensions in the south china sea. one of the leading filipino businessman two or three days ago talked about the need for philippines to be able to exploit energy resources in the west philippine sea. that is an area where the chinese partly claim sovereignty. also, the question of how the economies of the region move on while there is this constant political tension that affects the confidence of outsiders in the region sometimes. haslinda: in your conversations with all the difference representatives, what is the sense about how the u.s.-china tensions might play out? >> i think everybody is looking to see if we can create a stronger set of relationships

between the u.s. and china. of course, the united states' position is that on technology, they want to protect a small garden around which they want to build high walls. in this part of the world, they are worried that garden might become very vague and the walls even higher. i'm sure the issue of geo-technology, so to speak, will also be raised by a number of speakers. haslinda: one final question before we let you go. trump has been making headlines today. he has been convicted for all 34 counts, but there is still a chance he might be the president. how might that shape the political landscape, both in the u.s. as well as its relations with this part of the world? >> i think in asia, everyone knows that president trump does want to have a winning position with regard to china, and you can only have a winning position with regard to china if you want to be engaged in the region, so i don't think there is a worry that under a trump administration, the united states might pull back. there might be a worry under the trump administration that

instead of merely competing from time to time with china on all counts, a trump administration would want to win, and if that is the case, there will be more u.s.-china tensions. haslinda: a lot of questions about how the u.s. would be to partners and allies in this part of the world under a trumpet ministration. do you think he will still be committed or will it be a u.s.-first policy? >> i think a trumpet ministration will be committed to its major allies -- australia, new zealand, japan, korea, philippines, thailand in this region. trump is known to be transactional, so he might charge them a little bit more for the u.s. military presence in their countries. haslinda: thank you for joining us. we are coming to you live from the shangri-la dialogue here in singapore. still to come, we are talking about the seatac -- citi indian

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five-session losing streak just about managing to snap that. i think getting a bit of reprieve and tracking what we see across the rest of the asia pacific as investors also keep an eye out for the fed's preferred gauge of inflation, that data on pce that is due later today. the greenback has been picking up slightly, and we are seeing still even in the face of that the rupee covering some lost ground. this is what we are seeing in stock markets. let's look at what we are seeing in the gdp expectations. we are going to get the full your number today, and it is expected to show growth of almost 8%. this could be a boost to the modi government, especially as we keep an eye out for those election results next tuesday. ahead of that, of course, we will be watching closely for what we get out of those exit polls. haslinda: that's right. let's preview those gdp numbers.

let's bring in the chief indian economist at citi, which is holding its 10 asian conference in singapore this week. good to have you with us. your expectations for the gdp number? >> i think it has been quite a resilient quarter for growth, looking at around 6.5% kind of a gdp print, which should mean that for the full year fiscal 2024, we should be somewhere around 7.6%, .8% on overall gdp. yes, we have a little bit of divergence in the drivers of gdp where it is driven more by the investment side of the economy rather than the consumption side of the economy, but the key question would also be divergence between gdp numbers and the tv numbers, which has been a bit of a concern for investors, but we think that in this quarter, the divergence should never down to some extent with only a 50 basis point divergence versus a 180 basis

point divergence which we saw in the last quarter. haslinda: what is the longer-term outlook for india given what you have just said? consumption has been pretty lackluster. >> i think the government is focusing and lot of supply-side measures, trying to create more infrastructure capacity, and the optimism is that with these supply-side measures, we will see more employment growth, more income growth, and that will finally make the demand side also recover. at this moment, like in a lot of other places in the world, we are also seeing some sort of divergence between the higher end of the spending and lower end of the spending. we think this will never down as we progress because india has a huge demographic dividend to work with, so we think that around 7% to 7.5 percent gdp

growth over the next few years is quite doable, and if we do the right kind of reforms, then possibly we could push it up to even 9% to 10% as well, and given india's demographics, that is something which we need to aspire for. haslinda: this is a government that is looking at the school consolidation. might that impact its investment plans, do you think? might that slow down, for instance, spending on infrastructure? >> at least for this year, the government has a bonanza from the rv i in the form of larger than expected dividend of almost 0.4% of gdp extra, so when the new government presents a budget some time in july, they will have the choice of using the 0.5% of gdp either for deficit reduction or expenditure

increase, so even if they use up part of this for hire, then at least for the next year, world should be maintained. the bigger problem is not the money. the bigger problem is that it will create the institutional capacity to spend this money in a more productive way for infrastructure development in a wider variety of public, including places like public infrastructure, water, power, etc., so it is a long process, and i think the government is quite committed to it because that is how we will reduce our cost difference between india and the rest of the world on the manufacturing side, and that would make india the manufacturing powerhouse it wants to become. haslinda: one of the big questions in the market is when the rpi -- the rpi will start cutting rates. do you expect it to be able to

be independent from the fed or will it be waiting on the fed? >> our sense is that the rv i is very committed to seeing before percent inflation target to be met, not just comfortable with any number. from that perspective, we wait for a few more months, maybe around october is when we start seeing the first rate cut. that is because by then, they would have visibility in 2025, inflation is aligning towards the 4% mark. they will also have clarity on how the monsoon has progressed and will have better clarity on how the global rate michael is evolving, so that kind of gives them the right backdrop to start the easing cycle, so october is our call for the first rate cut, but it will be a very shallow rate cut cycle.

not expecting more than a few basis points of rate cut this year. haslinda: surging temperatures in india, 52 degrees right now -- how might that impact the economy? >> this is quite unprecedented, and obviously, there is some fear this could feed into inflation. our sense is this is not an immediate thing because we just had the winter crop harvest, which was quite good, so how this filters into the summer harvest is what we need to see. as of now, the prediction is that this is going to be a good year for monsoon. all the forecasts are talking about a normal monsoon. that could potentially mean that you are somehow able to scrape through this period without much inflation effect. my only worry is that if this heat wave affects the quality of the winter crop, then maybe it

filters into inflation with a three to six-month lag. haslinda: thank you so much for your time today. chief india economist at citi. keep it here. i, plenty more with us. this is bloomberg. ♪

haslinda: our coverage at the 2024 shangri-la dialogue will continue throughout the day. some key things we are watching out for -- the first in-person meeting between u.s. defense secretary lloyd austin and chinese defense minister will be taking place, expected at 1:00 p.m. local time. of course, we have military relations between the two sides resuming only about a year ago, but still, a lot of pressure on relations, especially on the back of the u.s. re-imposing tariffs on u.s. imports. we are also keeping an eye on ferdinand marcos junior's keynote address. that's happening tonight. we know tensions in the south china sea have been rising. we would like to take a temperature check on where they are headed. of course, we have marcos insisting time and again that the philippines is taking measures to bring relations back on an even keel. he talks about not wanting to

poke the bear. we will also speak with the lithuanian prime minister this afternoon. lithuania among baltic states vulnerable to russian imperialist i guess goals will take a pulse on where relations are headed. the markets, and lift him softer than expected data out of the u.s. that is it for bloomberg markets asia. horizons middle east and africa is next. this is bloomberg. ♪

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