India Economics Update Has demonetisation been a complete failure? On the face of it, demonetisation has been an abject failure given its lack of success in rooting out illicit wealth while also causing growth to slow sharply. But demonetisation is likely to have... 6th September 2017 · 1 min read
India Economics Update Inflation set to rise again Consumer price inflation is likely to have accelerated further in August, due in large part to a sharp jump in vegetable price inflation. Core price pressures are also building, meaning there is no... 5th September 2017 · 1 min read
India Economics Update Will the strength of the rupee be sustained? Strong inflows into India’s equity and bond markets have been a key reason behind the strengthening of the rupee against the US dollar in recent months. But there are reasons to think that these... 23rd August 2017 · 1 min read
India Economics Update Rise in bond yields has further to run The rise in Indian bond yields over the past couple of weeks reverses only a small portion of the drop since the start of 2017. But looking ahead, with the RBI ramping up its open market sales and... 21st August 2017 · 1 min read
India Economics Update Reserve Bank’s MPC minutes show inflation concerns The minutes of the Reserve Bank of India’s (RBI’s) August policy meeting show that, despite voting to cut interest rates, most members remain cautious about the outlook for inflation. Indeed, with... 17th August 2017 · 1 min read
India Economics Update Trade deficit to remain in check India’s monthly trade deficit narrowed in July, and a number of factors should ensure that it remains in check over the coming months. This should keep India’s financial markets relatively secure in... 15th August 2017 · 1 min read
India Economics Update Central government fiscal deficit target under pressure The rapid expansion of the central government’s deficit in the early part of this fiscal year is a common occurrence, as revenues tend to get ramped up in the latter months. Even so, there are a... 11th August 2017 · 1 min read
India Economics Update Drop in food inflation comes to an end We think that consumer price inflation in India held steady in July, as the recent sharp drop in food inflation appears to have come to an end. Further ahead, we agree with the RBI’s view that... 8th August 2017 · 1 min read
India Economics Update Political strength puts onus on PM Modi to step up on reform 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 Prime Minister... 3rd August 2017 · 1 min read
India Economics Update RBI rate cut to be followed by prolonged hold The Reserve Bank of India (RBI) went with consensus expectations in cutting its repo rate by 25bp to 6.00% today. But it also acknowledged that inflation would soon be rising again. As such, further... 2nd August 2017 · 1 min read
India Economics Update Is the corporate bond market being stifled? Recent regulatory changes to India’s offshore rupee (so-called “masala”) bond market have led to concerns that its growth will be stifled, but these seem overdone. Over the longer term, the market is... 31st July 2017 · 1 min read
India Economics Update A closer look at the services sector India’s GDP data for Q2 are due to be released at the end of August. We, and many others, remain sceptical about the accuracy of the national accounts data, making it important to track alternative... 26th July 2017 · 1 min read
India Economics Update Bond market takes RBI intervention in its stride The bond market has taken the Reserve Bank of India’s (RBI’s) surprise announcement of increased open market sales of government securities in its stride, with yields on local-currency debt remaining... 19th July 2017 · 1 min read
India Economics Update Trade position remains comfortable India’s trade deficit retreated in June from a 30-month high in May. With imports of key commodities such as oil and gold likely to stay in check, the overall trade deficit should remain at a... 17th July 2017 · 1 min read
India Economics Update Food and fuel inflation likely to drop again Consumer price inflation is likely to have eased again in June, due in large part to another drop in food and fuel inflation. But inflation is close to bottoming out, and is likely to begin rising... 7th July 2017 · 1 min read
India Economics Update Rise in coal production belies long-term challenges A rise in domestic coal production this year has led some to suggest that the government could yet achieve its goal of ending its reliance on imports within the next three years. But the sector... 6th July 2017 · 1 min read
