Confirmation that the RBI’s current target of 4% headline inflation will be maintained for another five years is the best outcome from an economic perspective, as tinkering with it could have un-anchored inflation expectations and resulted in rates having to be higher in the years ahead. Meanwhile, the latest balance of payments data show that India recorded a current account surplus of 1.5% of GDP in 2020 and, while that is likely to prove fleeting, the big picture is that the returning deficit should remain small by past standards.
Our Singapore office will be closed on 02 April 2021 for Good Friday, and we are sending the Weekly earlier than normal.
Note: Chief Asia Economist Mark Williams and Senior India Economist Shilan Shah will be holding a Drop-In at 0900 BST/1600 SGT on Wednesday 7th April to discuss the RBI’s latest policy decision and its implications for India's economic outlook. Register here for the 20 minute online session.
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