India Economics Update A small helping hand for households Measures unveiled by Finance Minister Nirmala Sitharaman over the weekend including a cut to excise duties on petrol and ramping up of fertiliser subsidies should offer a small reprieve to households... 23rd May 2022 · 3 mins read
India Economics Weekly Heatwave damage, MPC minutes, WPI surge The government’s decision to restrict exports of wheat following heavy damage to crops from the heatwave will have limited impact on the trade balance and inflation. The bigger worry is that the... 20th May 2022 · 4 mins read
India Economics Weekly G-SAP redux? The recent jump in bond yields is reportedly causing consternation among policymakers. The big worry is the impact that higher bond yields would have on the trajectory of India’s public debt. This... 13th May 2022 · 4 mins read
India Data Response Consumer Prices (Apr.) & Industrial Production (Mar.) Headline consumer price inflation surged beyond even our above-consensus forecast to an eight-year high of 7.8% y/y in April. Given that it is likely to rise even higher over the coming months... 12th May 2022 · 2 mins read
India Economics Update RBI intervention will support the rupee The Indian rupee hit a record low against the US dollar today, but the big picture is that RBI intervention has helped it hold up better than most EM currencies recently. Given that the RBI has ample... 9th May 2022 · 4 mins read
India Economics Weekly Power shortages, new repo rate forecasts The ongoing heatwave and related power shortages in India pose a downside risk to growth, but we think the biggest risk is the upside one to inflation. Indeed, rising price pressures prompted the RBI... 6th May 2022 · 5 mins read
India Data Response PMI Surveys (Apr.) India’s April PMIs show activity picking up, but power shortages may weigh on output soon. The surveys also provide more evidence of price pressures growing. That suggests the RBI will follow up... 5th May 2022 · 2 mins read
India Economics Update Hawks take flight at the RBI The Reserve Bank today turned even more hawkish with an unscheduled, unconventional 40bp hike that takes the repo rate to 4.40%. We had been among the early hawks on Indian monetary policy and were... 4th May 2022 · 3 mins read
India Data Response Core Infrastructure Industries (Mar.) Growth in India’s core infrastructure industries slowed in March as production of some energy commodities fell. However, there are tentative signs that the rise in commodity prices caused by the war... 29th April 2022 · 2 mins read
India Economics Weekly Consensus may still be playing catch up Comments this week from MPC members strengthen our view that the repo rate will be hiked by 25bp (to 4.25%) in the next policy meeting in June. That view is now also shared by the consensus, which has... 29th April 2022 · 5 mins read
India Chart Pack Monetary conditions tighten The key policy development this month was the introduction of a new Standing Deposit Facility, through which the RBI will drain excess banking sector liquidity. The SDF now provides the floor for the... 28th April 2022 · 9 mins read
India Economics Update MPC minutes highlight change in priorities The minutes of the MPC’s early April meeting – in which the committee kept the repo rate on hold but introduced a new rate that set a higher floor for the interest rate corridor – confirm that taming... 22nd April 2022 · 2 mins read
India Economics Weekly PM Johnson trip, NBFC clean up, WPI surges Underpinning UK Prime Minister Boris Johnson’s visit to India are talks toward a free-trade agreement, which both countries are aiming to have in place before the end of the year. But the early... 22nd April 2022 · 3 mins read
India Economics Weekly Inflation surge sets stage for June rate hike We’ve been arguing for several months that both the consensus and the RBI have been underestimating the upside threats to inflation. Consumer price data for March released this week have reinforced... 14th April 2022 · 4 mins read
India Economics Update Trade deficit to resume widening before long The narrowing in India’s goods trade deficit in March was due in large part to a sharp drop in gold imports. Even if gold imports remain low, we still expect the trade and current account deficits to... 13th April 2022 · 2 mins read
India Economic Outlook Inflation will force the RBI’s hand The surge in global commodity prices will take a little gloss off India’s economic recovery this year but we still expect stronger GDP growth than the consensus. Higher commodity prices will also keep... 13th April 2022 · 19 mins read
