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India's monetary tightening cycle nears end as economy slows down: Societe Generale

The RBI’s rate-setting panel is due to meet December 5 to December 7 where it is widely expected to raise policy rates again

December 07, 2022 / 07:55 AM IST
Reserve Bank of India. (File)

Reserve Bank of India. (File)

India’s monetary policy tightening cycle is nearing its end with domestic growth slowing and concerns over US tightening ebbing, according to economists.

“With the Fed likely to slow down the pace of its rate hikes and the Indian economic recovery moving into the slow lane, we retain our view that the RBI is in its last leg of the rate hike cycle,” Kunal Kumar Kundu, India economist at Societe Generale said.

“With the major festival period over and the technical bounce-back from the depths of the pandemic low triggered by pent-up demand expected to run its course, the general expectation is that growth will slow next year,” he added.

India’s gross domestic product growth more than halved to 6.3 percent in July-September from 13.5 percent in April-June, data released on November 30 showed. The quarterly growth is in line with the consensus estimate – and the Reserve Bank of India's own forecast – of 6.3 percent.