BUSINESS
Limited space available for further monetary easing
Based on the current inflation outlook, the space for further easing is limited to 25-50 bps over the second half of this fiscal year
BUSINESS
Benign inflation clears runway for MPC’s bold cut and policy reset
In a bold and unconventional move, the RBI cut the Repo rate by 50 basis points to 5.5%, frontloading support for growth amid easing inflation and rising global risks. The policy stance was reset to neutral, hinting at limited future easing but full-throttle action now
BUSINESS
MPC cuts repo rate, signals more easing as US tariffs cloud global outlook
Easier monetary policy along with durable liquidity infusion will help ease financial conditions and enhance supply of credit in the economy
BUSINESS
India eyes long-term gains despite short-term US trade shock
The US administration’s latest tariff hike has sent ripples through global trade, with India among the countries significantly impacted.. As India navigates this high-stakes trade shift, ongoing negotiations with the US could be crucial in shaping the future of bilateral trade relations
BUSINESS
US tariffs an opportunity to lower trade barriers, enhance competitiveness, boost exports
The US administration’s reciprocal tariff plan may seem like a challenge, but for India, it also presents a strategic opportunity. By reducing tariffs — particularly on industrial inputs and key imports — India can boost its manufacturing competitiveness, attract foreign investment, and strengthen its position in global value chains. This shift could unlock long-term economic growth while improving trade ties with the US
BUSINESS
India’s GDP growth accelerates to 6.2 percent in Q3 FY25, poised for stronger Q4
India’s GDP grew 6.2% YoY in Q3 FY25, with growth expected to accelerate further in Q4. Strong private consumption and policy support are driving momentum despite global uncertainties
BUSINESS
Budget 2025: Growth slowdown, global challenges can best be countered by capex focus
The budget for the next fiscal year must endeavour to retain focus on capex and maintain it at levels in the range of 3-3.4% of GDP, which will be the highest in nearly two decades. That in turn will aid state level capex and help crowd in private corporate investments
BUSINESS
Estimated GDP growth pickup in second half to help fiscal policy stay the course
The central government can accelerate capital spending in line with budget estimates and continue to aid state level capex. Overall revenue growth is also supportive for maintaining capex at around 3% of GDP for another year
BUSINESS
Status quo on rates for now, but CRR cut will keep financial conditions supportive for growth
The infusion of durable liquidity, via the CRR cut, will help avoid any persistent liquidity squeeze, in turn giving MPC the time to assess the strength of the economic growth momentum and inflation pressures
BUSINESS
Q2 GDP growth underwhelms, but the economy has picked up in the current quarter
While Q2 growth is at a 7-quarter low, growth is likely to pick up during the second half of the fiscal year. And with inflation still much higher than the target, there is unlikely to be a shift in focus from inflation to growth during the MPC’s meeting next week
BUSINESS
Why alarm over India’s slowing economic growth is needless
There are ample indications that India’s growth story remains strong, recent concerns on slowing demand notwithstanding. To be sure, growth is reverting to its potential but that is on expected lines
BUSINESS
MPC signals monetary easing; time and size of rate cuts hinge on inflation
Whether a rate cut would be seen in December or later depends on how much inflation comes down
BUSINESS
GDP growth to pick up on improving outlook for private consumption, fixed investments
India’s real GDP growth moderated in the first quarter of 2024-25 as capital formation slowed down even as growth in private consumption, the largest component of GDP, picked up to its highest in seven quarters
BUSINESS
The Budget outlines future policy priorities while staying the course on fiscal consolidation
A thrust on capex and fiscal consolidation combined with the ongoing recovery in rural demand, along with overall macro-economic and price stability, is aimed at crowding in private capex, which in turn will help improve medium-term growth prospects and aid in job creation in the non-farm economy
BUSINESS
With fiscal space available, Budget 2024 likely to address consumption slowdown without curbing capex
It is pragmatic to provide fiscal support to consumption, as it will also help buttress private investment as firms add capex to cater to improved demand
LOK-SABHA-ELECTION
Uncertainty rears its head on the reforms front
Unwavering pursuit of productivity-enhancing reforms over the next 5 years and beyond are needed to take average real GDP growth to over 7.5 percent, over the medium to long term
BUSINESS
Strong growth momentum, bright outlook keep MPC focused on price stability
While the MPC can continue with the status quo over the first half of the fiscal year, the timing of the first rate cut and the magnitude of easing will depend upon CPI inflation moving closer to the 4% target on a sustainable basis and MPC’s assessment of the real neutral policy rate
BUSINESS
GDP data: A positive growth surprise, powered by investment even as consumption lags
Investment driven by public sector capex remains the dominant source of growth. Close to half of the headline real GDP growth is coming from growth in gross capital formation
BUSINESS
Fiscal consolidation and capex: Interim Budget strikes the right balance
The interim budget has used a positive economic backdrop to strengthen the long-term growth impulses provided by public investments, build back fiscal buffers to counter future shocks and aims to put public debt on a downward path to free up space for productive spending
BUSINESS
Union Budget 2024: Government must focus on capex, fiscal prudence to drive growth
For fiscal consolidation, the government will need to reduce its capital expenditure at a time when private capex is just starting to improve. Curbing capex poses a risk to growth and the interim budget must indicate a balance
BUSINESS
Room for limited monetary easing will open up in 2024
The recent IMF India country report on India notes that the current broadly neutral monetary policy is appropriate, based on the estimates of natural real interest rate of 1%. Based on that estimate and average inflation estimate of 5% in the next fiscal, Repo rate can be at 6% under a neutral stance – implying a 50 bps easing from the current level of 6.50%
BUSINESS
After a most stable 2023 performance, rupee set to gain in 2024
Strengthening external sector metrics, benign oil prices, robust portfolio dollar flows, monetary easing indicators and an anchored inflation will all contribute to the rupee’s strength in 2024
BUSINESS
GDP growth surprises positively driven by investments despite a strong external sector drag
Headline GDP growth could slow in the second half but the momentum may sustain, putting the growth for full year around 6.5-6.8 percent comfortably. Global headwinds remain the biggest downside factor
BUSINESS
Global bond index inclusion can attract $20-50 billion in capital, but increases risks too
The move would help reduce interest costs and increase the availability of financial resources across the economy
