Siddhartha Sanyal

Multiple MPC members of late flagged the re-emergence of space for further monetary easing given the record-low CPI inflation

Since June, retail inflation sprang fresh downside surprises to reach six-year low of 2.1% y/y. Average CPI inflation in 2025-26 will likely undershoot the RBI's downwardly revised projection of 3.7%

With the shockingly low Q2 GDP growth of 5.4 per cent year-on-year (Y-o-Y) last week, growth during the first half of 2024-25 stands at 6 per cent

CPI-based inflation is expected to broadly align near the RBI's projection of 4.5% in 2024-25, despite perishable food price shock due to repeated weather aberrations

Inflation and central bank policy rates seem to have peaked for most countries, while the pace of economic activities remains varied across economies

Despite the current surge in CPI inflation, bulk of the rise came from food prices rather than in a broad-based fashion

One feels that arguments in favour of a pause in April are strong

Over the last couple of months, there have been major unfavourable developments with regards to both growth and inflation.

While this will mean material deviation from the FRBM road map, we feel that a decisive and credible stance on near-term fiscal deficit and FRBM targets is the need of the hour

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The Survey forecasts 2020-21 real GDP to grow at 6-6.5%

India's fiscal dynamics is typically pro-cyclical

Experts expect the rupee to have a stable-to-positive bias over the near term-likely at 61/$ through the next 3-6 months

The rupee's rise against the dollar since mid-July had broadly been in line with a host of other currencies and the weakness in the broader dollar index