India Economics Update Should we be worried about capital flows? A drop in foreign direct investment inflows and a pick-up in portfolio inflows into India has led to concerns that the economy is once again becoming vulnerable to a sudden halt in foreign financing... 21st March 2018 · 1 min read
India Economics Update Trade deficit stabilises as protectionist clouds gather India is one of many economies facing a more protectionist stance from the US. Its dependence on exports to the US is low though, an inadvertent positive stemming from its failure to develop a world... 15th March 2018 · 1 min read
India Economics Update PNB scandal highlights need for governance reforms The fraud scandal engulfing Punjab National Bank, India’s second largest state-owned bank, is a stark reminder that recent measures to revive the banking sector, including the recapitalisation package... 13th March 2018 · 1 min read
India Economics Update Drop in headline inflation to prove temporary Consumer price inflation is likely to have eased in February, due to a drop in food and fuel inflation. But core price pressures are still building. We think this will ultimately prompt the Reserve... 8th March 2018 · 1 min read
India Economics Update State elections come into focus Prime Minister Modi is facing his busiest year of state elections in 2018. Elections that are due to take place this year will have an important bearing on economic policy at the local level, and will... 27th February 2018 · 1 min read
India Economics Update Local markets unable to escape global rout Indian financial markets have not been able to escape the recent turmoil in global markets, with equities dropping sharply and the rupee weakening against the US dollar. Looking ahead, we expect... 22nd February 2018 · 1 min read
India Economics Update MPC minutes reiterate inflation and fiscal concerns The minutes of the Reserve Bank of India’s (RBI’s) February policy meeting show that most MPC members are concerned about recent fiscal developments and the inflation outlook. Indeed, with core... 22nd February 2018 · 1 min read
India Economics Update Trade deficit unlikely to widen much further India’s monthly trade deficit widened to its highest level since the taper tantrum in January. But we don’t think this is reason to panic just yet. Exports should rebound following disruptions related... 15th February 2018 · 1 min read
India Economics Update Reserve Bank is right to turn more hawkish Consumer price inflation is likely to have accelerated again in January, due to another rise in food inflation. But core price pressures are also continuing to build. This was acknowledged by the RBI... 8th February 2018 · 1 min read
India Economics Update RBI turns more hawkish The RBI’s decision to hold its repo rate at 6.00% today came as no surprise but it sounded notably more hawkish in the policy statement. This supports our non-consensus view that rate hikes are likely... 7th February 2018 · 1 min read
India Economics Update FY18/19 budget: fiscal deficit targets relaxed The finance ministry faced a tricky balancing act in today’s budget announcement for FY18/19 as it aimed to shore up popular support ahead of a busy 18 months of elections while also demonstrating... 1st February 2018 · 1 min read
India Economics Update Economy becoming increasingly formalised A key theme running through the government’s latest Economic Survey is the growing numbers of workers and firms being brought into the formal economy, and so subject to taxation and closer regulatory... 30th January 2018 · 1 min read
India Economics Update Budget preview: deficit targets under pressure The finance ministry faces a delicate balancing act in the upcoming union budget for FY18/19, which will be unveiled on 1st February. On the one hand, it will be under pressure to loosen policy ahead... 26th January 2018 · 1 min read
India Economics Update A mixed start to the year Indian financial markets have had a mixed start to the year with equities surging, the rupee remaining stable against the US dollar, and bonds continuing to sell-off. Looking ahead, we think that... 22nd January 2018 · 1 min read
India Economics Update Government likely to miss fiscal deficit target India’s fiscal deficit has overshot the central government target so far in FY17/18. This doesn’t necessarily signal that the target will be missed – revenues tend to get ramped up in the final months... 19th January 2018 · 1 min read
India Economics Update Time to worry about the trade deficit? India’s trade deficit widened to a three-year high in December, but we don’t think this is cause for major concern just yet. Exports should rebound following disruptions related to the GST, while... 16th January 2018 · 1 min read
