India Economics Weekly Signs of financial stress emerge The sharp widening in credit spreads over the past few days will have concerned policymakers and - like last year - a forceful response is likely if further signs of financial stress emerge. But while... 30th April 2021 · 5 mins read
India Economics Weekly How damaging will be the new restrictions be? With the economic damage from last year’s lockdown still fresh in the memory, there appears to be little appetite for a return to extreme measures to curb the ongoing outbreak. But given the very... 23rd April 2021 · 4 mins read
India Economics Weekly Investment recovery enters a slower phase Monthly data suggest that the recovery in investment has slowed, and headwinds are mounting too. The surge in virus cases means lots of firms will tread with caution in the near term, while problems... 16th April 2021 · 3 mins read
India Economics Weekly QE or not QE isn’t really the question The RBI's new bond purchase programme announced this week has led to comparisons with quantitative easing (QE), but there appears to be some subtle differences. In truth however, it matters little... 9th April 2021 · 6 mins read
India Economics Weekly Inflation target maintained, external risks diminished 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... 1st April 2021 · 5 mins read
India Economics Weekly NPL floodgates open, new FX forecasts, state elections With the Supreme Court this week lifting its ban on banks classifying delinquent loans as non-performing, the last major extra-ordinary banking sector measure has been unwound and recorded NPLs are... 26th March 2021 · 4 mins read
India Economics Weekly Renewed virus outbreak a key downside risk The rise in new COVID-19 infections to a three-month high this week does not appear to be a major threat to India's economy yet as cases are still comparatively low and the outbreak has predominantly... 19th March 2021 · 3 mins read
India Economics Weekly Markets are jumping the gun on RBI rate hikes Financial markets appear increasingly convinced that the RBI is on the cusp of monetary tightening, perhaps due to fears of a re-run of the Taper Tantrum in 2013. But India isn’t as vulnerable to a... 12th March 2021 · 6 mins read
India Economics Weekly Stage is set for a faster economic recovery India's economic recovery continues to proceed faster than we’d expected. We are revising our forecast for GDP growth this year to 13.5%, above consensus expectations of an 11% rise in output. With... 5th March 2021 · 5 mins read
India Economics Weekly Does the inflation target need an overhaul? The debate over the RBI's 4% headline inflation target - which runs until next month and is currently being reviewed - has heated up this week. Some prominent government officials have suggested that... 26th February 2021 · 5 mins read
India Economics Weekly Investment recovery, oil price impact The latest monthly activity data suggest that investment staged a stronger recovery than we had anticipated at the end of 2020 and, as such, we are nudging up our estimate of Q4 GDP. Meanwhile, the... 19th February 2021 · 4 mins read
India Economics Weekly Policymakers will keep a lid on borrowing costs Indian yields rose significantly in the aftermath of the unexpectedly-accommodative Union Budget announcement but developments since - including a ramping up of open market operations - have helped to... 11th February 2021 · 5 mins read
India Economics Weekly The benefits and limitations of a “bad bank” The creation of a “bad bank” in India - for which plans were briefly discussed in the Budget announcement - would help restructure the loans of the most heavily-indebted firms and facilitate a clean... 5th February 2021 · 5 mins read
India Economics Weekly Finance Ministry’s balancing act, RBI’s opportunity For India watchers, next week will be one of the most important of the year. We think the Finance Ministry will attempt to demonstrate prudence in the Union Budget on Monday, though obfuscation of the... 29th January 2021 · 5 mins read
India Economics Weekly FX reserve accumulation will limit rupee gains The RBI has accumulated foreign exchange reserves at a rapid pace over recent months, and comments this week from Governor Shaktikanta Das indicate that the central bank intends to build up its... 22nd January 2021 · 4 mins read
India Economics Weekly Investment recovering, but headwinds remain The latest monthly activity data suggest that investment growth recovered further in Q4. The rebound should continue over the coming months, but is likely to slow in the second half of the year as... 15th January 2021 · 3 mins read
