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Why JPMorgan is suing a 30-year-old startup founder for $175 million?

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ByRitu Maria Johny | Edited by Aryan Prakash

JPMorgan Chase is suing the 30-year-old founder of Frank, an education startup it acquired for $175 million, for fabricating its scale of operations and number of users, according to a Forbes report. Founded in 2016 by Charlie Javice, an Ivy League graduate, the startup aimed to help American students in funding for college. It found the backing of billionaire Marc Rowan and other investors like Aleph, Chegg and Reach Capital.

According to the lawsuit filed last year in the U.S. District Court in Delaware, Javice sold her company to JPMorgan Chase in 2021 on the premise that the company had over 4 million customers, when in reality, it had fewer than 3 lakh users.

After the acquisition, Javice was appointed as a managing director at JPMorgan. Frank’s chief growth officer Olivier Amar is also alleged to have been involved in the crime and has been named in the lawsuit.

JPMorgan Chase uncovered the deception when they received “disastrous returns” from its marketing campaign to Frank’s customer list. It came to light that Javice had engaged the services of a New York data scientist to forge millions of customers for $18,000 and purchased another data set of 4.5 million students from ASL Marketing for $105,000.

However, this is not the first time that Javice has come under the scanner. Congress members in 2020 had previously raised concerns over Frank’s “deceptive” practices.

JPMorgan Chase backed up its claims with proof of emails and messages exchanged between Javice, the data scientist and Amar, which revealed the extent of the fraud. While the bank is seeking damages, Javice and Amar have filed lawsuits in response to the allegations.

Notably, Javice has been featured on Forbes’ 30 under 30 list too.

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India’s inflation will fall to 5% in 2023, 4% in 2024: IMF

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Inflation in India is expected to come down from 6.8 percent in the current fiscal year ending March 31 to 5 percent the next fiscal, and then drop further to 4 percent in 2024, the International Monetary Fund (IMF) said on Tuesday.

“Inflation in India as in other countries is expected to come down from 6.8 percent in 2022 to 5 percent in 2023 and then 4 percent coming towards the target in 2024,” Daniel Leigh, Division Chief, Research Department of the IMF told reporters here.

Also Read | ‘Turning point’: IMF raises 2023 world growth forecast to 2.9%, 1st in a year

“That partly reflects the central bank’s actions,” he added,

According to the World Economic Outlook update released by the IMF on Tuesday, about 84 percent of countries are expected to have lower headline (consumer price index) inflation in 2023 than in 2022.

Global inflation is set to fall from 8.8 percent in 2022 (annual average) to 6.6 percent in 2023 and 4.3 percent in 2024 — above pre-pandemic (2017–19) levels of about 3.5 percent, it said.

Also Read | UK economy to fare worse than any other country in developed world in 2023: IMF

The projected disinflation partly reflects declining international fuel and non-fuel commodity prices due to weaker global demand. It also reflects the cooling effects of monetary policy tightening on underlying (core) inflation, which globally is expected to decline from 6.9 percent in the fourth quarter of 2022 (year over year) to 4.5 percent by the fourth quarter of 2023, the IMF said.

“Still, disinflation will take time: by 2024, projected annual average headline and core inflation will, respectively, still be above pre-pandemic levels in 82 percent and 86 percent of economies,” it said.

In advanced economies, annual average inflation is projected to decline from 7.3 percent in 2022 to 4.6 percent in 2023 and 2.6 percent in 2024 — above target in several cases. In emerging markets and developing economies, projected annual inflation declines from 9.9 percent in 2022 to 8.1 percent in 2023 and 5.5 percent in 2024, above the 4.9 percent pre-pandemic (2017–19) average, the IMF said.

In low-income developing countries, inflation is projected to moderate from 14.2 percent in 2022 to 8.6 percent in 2024 — still high, but close to the pre-pandemic average, it further said.

In a blog post, Pierre-Olivier Gourinchas, Chief Economist and Director, Research Department of the IMF, wrote that global inflation is expected to decline this year but even by 2024, projected average annual headline and core inflation will still be above pre-pandemic levels in more than 80 percent of countries.

“The inflation news is encouraging, but the battle is far from won. Monetary policy has started to bite, with a slowdown in new home construction in many countries. Yet, inflation-adjusted interest rates remain low or even negative in the euro area and other economies, and there is significant uncertainty about both the speed and effectiveness of monetary tightening in many countries,” Gourinchas said.

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At 6.1%, India to be fastest-growing economy, projects IMF; China at 5.2%

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The International Monetary Fund (IMF) on Tuesday released its latest projections on world economic growth and predicted a dip in the Indian economy from 6.8 per cent in 2022 to 6.1 per cent in 2023. But India is expected to grow at 6.8 per cent again in the financial year 2024.

The global economy is estimated to take a plunge to 2.9 per cent in the next fiscal year, slowing down from 3.4 per cent in the current fiscal year until March. It predicted a rise of 3.1 per cent in FY 2024.

India remains the fastest-growing economy in the world with the current estimates surpassing growth in emerging and developing Asia as well as projections on China’s economy. Growth in China is predicted to increase to 5.2 per cent in 2023, amid the loosening of Covid-19 restrictions and then dip to 4.5 per cent in 2024.

China and India together account for nearly half of the global growth in 2023. The outlook in emerging and developing Asia is positive with a rise to 5.3 per cent from 4.3 per cent.

A marginal rise in growth has been projected for emerging market and developing economies from 3.9 per cent in 2022 to 4 per cent in 2023, while advanced economies are expected to slump with a decline from 2.7 per cent to 1.2 per cent and 1.4 per cent this year and next. Growth in the US will decelerate to 1.4 per cent in the next fiscal year amid increasing interest rates. Euro area is projected to nosedive from 3.5 per cent in the current FY to 0.7 per cent in 2023, amid war in Ukraine, energy crises and a tightening monetary policy.


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‘Turning point’: IMF raises 2023 world growth forecast to 2.9%, 1st in a year

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AFP | | Posted by Ritu Maria Johny

Global growth is set to be higher than expected this year, the IMF said Monday, raising its forecast on surprisingly strong consumption and investment while China’s lifting of zero-Covid restrictions provides another boost.

The International Monetary Fund expects the world economy to expand 2.9 percent this year, slowing from 2022 to a rate that remains weak by historical standards, said its latest World Economic Outlook update.

“The year ahead will still be challenging… but it could well represent a turning point with growth bottoming out and inflation declining,” IMF chief economist Pierre-Olivier Gourinchas told reporters.

While China’s easing of coronavirus restrictions paves the way for a faster-than-expected recovery, the rise in central bank rates to fight inflation and Russia’s war in Ukraine continue to weigh on economic activity, the Washington-based crisis lender said in its report.

But “adverse risks have moderated” since October’s forecast, the IMF added.

The fund now sees Germany and Italy avoiding recessions, as European growth proved “more resilient than expected” despite war in Ukraine.

But it warned that slower growth this year is driven by advanced economies.

US growth is seen falling to 1.4 percent in 2023 and euro area growth is to slump to 0.7 percent, while the United Kingdom economy contracts.

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