India Economics Update Trade deficit to remain in check India’s monthly trade deficit narrowed significantly in December, and a number of factors should ensure that it remains in check over the coming months. This should keep India’s financial markets... 16th January 2017 · 1 min read
India Economics Update Extinguishing RBI’s liabilities unlikely to bring much benefit India’s government has moved to strip the legal status of banknotes affected by demonetisation that are still in circulation. This would have the result of extinguishing some of the RBI’s liabilities... 9th January 2017 · 1 min read
India Economics Update Demonetisation pushing prices down Consumer price inflation is likely to have edged down in December as price discounting continued following demonetisation. However, further ahead, demonetisation could push inflation up by leading to... 6th January 2017 · 1 min read
India Economics Update PMIs suggest sizeable but not devastating demonetisation impact India’s December PMIs for both the manufacturing and services sectors suggest that the government’s demonetisation measures have had a significant, but not catastrophic, impact on economic activity. 4th January 2017 · 1 min read
India Economics Update What to expect in 2017 In our first Watch of 2017, we outline the prospects for India’s economy over the coming 12 months. The government’s demonetisation measures will lead to some weakness at the beginning of the year... 3rd January 2017 · 1 min read
India Economics Update Markets take Fed rate hike in their stride Financial markets in India have taken last week’s decision by the US Fed to hike interest rates for the first time in a year in their stride. A bigger test might come if the Fed now tightens more... 20th December 2016 · 1 min read
India Economics Update Export rebound continues, but government target too ambitious Trade data for November show that export values continued to recover last month. Looking ahead, export growth should remain positive, but the government’s target of nearly doubling export values from... 16th December 2016 · 1 min read
India Economics Update Balance of payments position remains secure The narrowing in India’s current account deficit over a four-quarter sum in Q3, along with another rise in net FDI inflows, leaves the economy looking well-placed to cope in the event of a renewed... 14th December 2016 · 1 min read
India Economics Update Demonetisation could boost inflation over longer term We think that consumer price inflation dropped in November as the government’s demonetisation measures are likely to have led to some price discounting. However, demonetisation could boost inflation... 9th December 2016 · 1 min read
India Economics Update RBI looks complacent while waiting for clarity on demonetisation Having previously shown that it was willing to prioritise growth even at the risk of missing targets for inflation, the RBI’s decision today to keep interest rates on hold despite the downside risks... 7th December 2016 · 1 min read
India Economics Update What next for the rupee? Markets largely shrugged off the recent fall in the rupee to a record low against the US dollar, and were right to do so. With other EM currencies also weakening and inflation higher in India than... 30th November 2016 · 1 min read
India Economics Update Demonetisation sparks further bond market rally The government’s surprise demonetisation announcement has led to a sharp rise in bank deposits over the past couple of weeks. The rush of liquidity in the system has led to a fall in interbank rates... 21st November 2016 · 1 min read
India Economics Update Assessing the early impact of demonetisation Despite many anecdotal reports of turmoil in the wake of last week’s surprise demonetisation, and undoubted hardship for many, the early evidence suggests that the economic impact of the move has been... 18th November 2016 · 1 min read
India Economics Update External position healthy despite wider trade deficit Although the monthly trade deficit widened a touch in October, a number of factors should keep it in check over the coming months. This should keep India’s financial markets relatively secure in the... 15th November 2016 · 1 min read
India Economics Update PM Modi steps up anti-corruption drive The announcement late yesterday that India’s two largest denominations of banknotes have ceased to be legal tender with immediate effect is likely to weigh on economic activity in the near term, with... 9th November 2016 · 1 min read
India Economics Update Drop in food inflation has run its course Consumer price inflation is likely to have edged up in October, as the recent sharp slowdown in food inflation appears to have bottomed out. But with the central bank focused on supporting growth, the... 7th November 2016 · 1 min read