Leif Eskesen, chief economist for India and ASEAN at HSBC feels it is premature to talk about a cut in rate by Reserve Bank of India (RBI). "The policy rates would not come down before end of next fiscal," he added.
Moreover, he expects the October inflation to be at 9.7%. He indicated that the overall credit growth has signs of slowdown and slowdown in exports will remain a concern. He also said that moderation in growth is expected to continue. Here is the edited transcript of his interview to CNBC-TV18. Also watch the accompanying video. Q: What were your expectations from the IIP data? How long do you think we will have to live with this low single digit IIP number?
A: I expected the IIP number to be quite lacklustre. The couple of things that work against growth at the moment are the tight monitoring policy and elevated level of inflation.
The global concerns will have a negative implication for investment. Across the consumer segment, we have the strikes and complaints that have been intensified which will also bring down growth.
We expect negative sequential growth and annual growth forecast for IIP is 3.5%. These low single digit numbers would be with us for quite a while. Q: How much do you think the market still puts out for these numbers, considering how volatile they have been? How important will it be for you in terms of determining what
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