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Six expectations from Budget 2021 for Commodity market by Kotak Securities

The focus of Budget 2021-2022 could be largely to mend the economy and boost growth and fight inflationary pressures. While the economy came under pressure, the commodities market was also not left unaffected.

January 30, 2021 / 12:12 PM IST

The ruling BJP government is set to announce its eighth Annual Budget on February 1, 2021. The year 2020 was a challenging year for all major economies, including India, as governments imposed strict measures to limit the virus spread but this impacted economic growth.

We have now entered the New Year on an optimistic note as the vaccination process has begun fueling hopes of a recovery. However, economic recovery is expected to be slow and laboured and government support will be needed to boost the pace.

So the focus of Budget 2021-2022 could be largely to mend the economy and boost growth and fight inflationary pressures. While the economy came under pressure, the commodities market was also not left unaffected.

We saw sharp volatility across commodities as prices slumped earlier in the year owing to demand destructions but recovered on the back of stimulus measures and robust Chinese buying as is evident from higher commodity imports.