India Economics Update New MPC will have more work to do The minutes of the Reserve Bank’s August policy meeting show that the MPC – of which three members are now due to step down – has turned notably more hawkish on the inflation outlook. But there are... 21st August 2020 · 3 mins read
India Economics Update External and domestic demand struggling to recover India’s monthly goods trade balance swung back into deficit in July, but the fact that it remains small means that there is little concern regarding external stability. Nevertheless, the underlying... 17th August 2020 · 2 mins read
India Economics Update Industrial recovery running out of legs The recovery in India’s industrial sector has stalled. Given the substantial damage caused during the lockdown and the likelihood of a re-imposition of containment measures, the road to normality for... 12th August 2020 · 2 mins read
India Economics Update RBI on hold, but more easing to come The only new step taken by the RBI today was the introduction of a new framework to help struggling borrowers manage their bank debt. The MPC voted unanimously to keep the repo and reverse repo rates... 6th August 2020 · 3 mins read
India Economics Update Rare trade surplus gives little reason to cheer India’s monthly trade balance swung into its largest monthly surplus on record in June. But this is not something to celebrate since it is the result of continued weakness in domestic demand. 16th July 2020 · 2 mins read
India Economics Update Industrial recovery will be slow and protracted The slump in industrial production eased in May, confirming that the recovery in industry is now underway. But given the likelihood of a renewed tightening in containment measures and the substantial... 13th July 2020 · 2 mins read
India Economics Update Inflation unlikely to be a pressing concern Daily price data suggest that food inflation has eased over recent weeks and, with demand also likely to remain depressed, inflation does not appear to be a pressing concern. The focus of policymakers... 9th July 2020 · 3 mins read
India Economics Update A brief foray into current account surplus India’s current account swung into a rare surplus in Q1. That probably won’t last for long as oil prices rebound, remittances drop and the trade deficit starts to widen again over the coming months... 1st July 2020 · 3 mins read
India Economics Update BJP building its political strength 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 the BJP has the... 22nd June 2020 · 3 mins read
India Economics Update Remittance slump would add to economic woes Worsening employment prospects for Indian migrants in the Gulf and the US mean that remittance inflows are likely to drop even as lockdowns are eased. While this won’t have severe ramifications for... 17th June 2020 · 3 mins read
India Economics Update Trade data provide cold comfort The slight easing in the y/y contraction in goods exports and imports in May supports evidence from elsewhere that the worst has now passed for the economy. But both remain extremely weak, and a sharp... 16th June 2020 · 2 mins read
India Economics Update Industry past the worst but recovery will be slow Industrial output ground to a halt in April but high-frequency indicators including electricity consumption and air pollution levels suggest that activity has edged up since then. However, lasting... 15th June 2020 · 2 mins read
Asia Economics Update South Asia and the lockdown dilemma Lockdowns are being eased in India, Pakistan and Bangladesh without any sign that coronavirus infections are being brought under control. Economic recoveries will face greater headwinds than in places... 9th June 2020 · 3 mins read
India Economics Update MPC minutes suggest further loosening likely The minutes of the Reserve Bank’s late May policy meeting – in which it trimmed both the repo and reverse repo rates – show that the MPC has become markedly more bearish on the outlook for economic... 8th June 2020 · 2 mins read
India Economics Update Inflation should not constrain policymakers Daily price data give a strong indication that food inflation dropped in May, most likely as supply disruptions eased a touch and agricultural activity was allowed to resume. With global oil prices... 4th June 2020 · 3 mins read
India Economics Update Reforms through the back door Prime Minister Modi’s BJP has expedited structural reforms that normally face stiff political resistance, ostensibly as part of efforts to support recovery from the coronavirus crisis. These moves... 2nd June 2020 · 3 mins read