India Economics Update New Finance Minister faces delicate balancing act Nirmala Sitharaman, who has just been selected to replace Arun Jaitley as Finance Minister, faces a delicate balancing act in her new role. On the one hand, she will want to display fiscal rectitude... 31st May 2019 · 1 min read
India Economics Update Drop in car sales exaggerating consumption weakness The recent sharp drop in vehicle sales might signal that household consumption has slumped. But a significant part of the drop in sales can be explained by industry-specific factors including higher... 22nd May 2019 · 1 min read
India Economics Update External deficit in check amid rising trade tensions India’s monthly goods trade deficit widened in April but, given its very low exposure to a ratcheting up of trade tensions between the US and China and the fact that oil prices are likely to fall, we... 16th May 2019 · 1 min read
India Economics Update Inflation Monitor (Apr.) Headline consumer price inflation is likely to have risen in April due to another pick up in food inflation. However, it will have remained below the RBI’s 4.0% target. That will be enough to prompt... 7th May 2019 · 1 min read
India Economics Update The economic impact of the monsoon The extent of the monsoon rains has a significant impact on the livelihoods of millions of families in India given the high level of employment in agriculture. But at the macro level, the monsoon... 30th April 2019 · 1 min read
India Economics Update Remittances to remain a key source of funding Remittances from abroad are an important source of external funding for India and were equivalent to almost 3% of GDP in 2018. That was more than FDI and portfolio inflows combined. Although there are... 23rd April 2019 · 1 min read
India Economics Update Wider trade deficit no cause for alarm India’s monthly goods trade deficit widened a touch in March but, with oil prices likely to fall, we think the deficit will remain contained over the coming months. In turn, that should help to keep... 16th April 2019 · 1 min read
India Economics Update Inflation Monitor (Mar.) Headline CPI inflation will have remained low in March, even if, as we suspect, it rose slightly as food inflation continues to pick up. The RBI will almost certainly follow up its cumulative 50bp of... 8th April 2019 · 1 min read
India Economics Update RBI delivers another pre-election gift The RBI has delivered another pre-election gift to the government by lowering rates at a second successive meeting. A low level of headline inflation provided justification for the move. But with core... 4th April 2019 · 1 min read
India Economics Update Current account deficit to remain in check India’s current account deficit widened at the end of 2018 but this shouldn’t reignite concerns over the external position. With oil prices likely to fall, the deficit will remain at a comfortable... 1st April 2019 · 1 min read
India Economics Update Smaller trade deficit is here to stay India’s monthly goods trade deficit narrowed to a 17-month low in February and, with oil prices set to remain low, we think the shortfall will remain small over the coming months. In turn, that should... 18th March 2019 · 1 min read
India Economics Update Inflation Monitor (Feb.) Headline CPI inflation will have remained low in February even if, as we suspect, it rose a touch due to higher food inflation. As such, the RBI will almost certainly cut policy rates again, perhaps... 6th March 2019 · 1 min read
India Economics Update Modi government likely to continue with FDI reform Recent moves to tighten restrictions on foreign e-commerce firms are more a reflection of the government wanting to boost popular support ahead of the general election than a fundamental shift in... 4th March 2019 · 1 min read
Asia Economics Update Time to worry about the crisis in Kashmir? The fall in Pakistan’s stock market today is the first sign that investors are starting to become concerned about the escalating crisis in Kashmir. The most likely outcome is that tensions are dialled... 27th February 2019 · 1 min read
India Economics Update Higher services inflation a reflection of strong demand There is little evidence to suggest that inflation in the services sector is being boosted by “one-off” factors, as has been suggested by several MPC members. Instead, it appears to be a reflection of... 26th February 2019 · 1 min read
India Economics Update Wider trade deficit no cause for panic India’s merchandise trade deficit widened in January, but with oil prices likely to fall over the coming months, we think the shortfall will narrow again before long. In turn, that should help to keep... 18th February 2019 · 1 min read
