India Economics Update Plans for universal electricity access will fall short Prime Minister Narendra Modi’s announcement of a new project aimed at “electrifying” all of India’s households by the end of 2018 has grabbed headlines this month. But even if this ambitious target is... 29th September 2017 · 1 min read
India Economics Update Gold imports likely to ease The strength of gold imports in recent months is the result of temporary issues related to the new GST rather than buoyant underlying demand. As these issues get resolved, we expect gold imports to... 20th September 2017 · 1 min read
India Economics Update Bond yields continue to rise Indian bond yields have continued to rise so far in September. Looking ahead, with the RBI ramping up its open market sales and no scope for further policy loosening, we think that bond yields will... 20th September 2017 · 1 min read
India Economics Update Widening current account deficit no major concern While there was a widening in India’s current account deficit in Q2, the more important point is that the external shortfall remains small. Given also that FDI inflows remain strong, the economy looks... 19th September 2017 · 1 min read
India Economics Update Banking sector woes to persist Recent comments from former Reserve Bank of India (RBI) governor Raghuram Rajan mirror our longheld view that the key to reviving the ailing domestic banking sector is for the government to infuse... 8th September 2017 · 1 min read
India Economics Update Has demonetisation been a complete failure? On the face of it, demonetisation has been an abject failure given its lack of success in rooting out illicit wealth while also causing growth to slow sharply. But demonetisation is likely to have... 6th September 2017 · 1 min read
India Economics Update Inflation set to rise again Consumer price inflation is likely to have accelerated further in August, due in large part to a sharp jump in vegetable price inflation. Core price pressures are also building, meaning there is no... 5th September 2017 · 1 min read
India Economics Update Will the strength of the rupee be sustained? Strong inflows into India’s equity and bond markets have been a key reason behind the strengthening of the rupee against the US dollar in recent months. But there are reasons to think that these... 23rd August 2017 · 1 min read
India Economics Update Rise in bond yields has further to run The rise in Indian bond yields over the past couple of weeks reverses only a small portion of the drop since the start of 2017. But looking ahead, with the RBI ramping up its open market sales and... 21st August 2017 · 1 min read
India Economics Update Reserve Bank’s MPC minutes show inflation concerns The minutes of the Reserve Bank of India’s (RBI’s) August policy meeting show that, despite voting to cut interest rates, most members remain cautious about the outlook for inflation. Indeed, with... 17th August 2017 · 1 min read
India Economics Update Trade deficit to remain in check India’s monthly trade deficit narrowed in July, and a number of factors should ensure that it remains in check over the coming months. This should keep India’s financial markets relatively secure in... 15th August 2017 · 1 min read
India Economics Update Central government fiscal deficit target under pressure The rapid expansion of the central government’s deficit in the early part of this fiscal year is a common occurrence, as revenues tend to get ramped up in the latter months. Even so, there are a... 11th August 2017 · 1 min read
India Economics Update Drop in food inflation comes to an end We think that consumer price inflation in India held steady in July, as the recent sharp drop in food inflation appears to have come to an end. Further ahead, we agree with the RBI’s view that... 8th August 2017 · 1 min read
India Economics Update Political strength puts onus on PM Modi to step up on reform Recent developments have strengthened the ruling BJP’s hand in the Rajya Sabha (the upper house of parliament). This should help to ease the passage of economic reforms, provided that Prime Minister... 3rd August 2017 · 1 min read
India Economics Update RBI rate cut to be followed by prolonged hold The Reserve Bank of India (RBI) went with consensus expectations in cutting its repo rate by 25bp to 6.00% today. But it also acknowledged that inflation would soon be rising again. As such, further... 2nd August 2017 · 1 min read
India Economics Update Is the corporate bond market being stifled? Recent regulatory changes to India’s offshore rupee (so-called “masala”) bond market have led to concerns that its growth will be stifled, but these seem overdone. Over the longer term, the market is... 31st July 2017 · 1 min read