Budget, RBI take centre stage after historic EU trade deal

After the announcement this week of the long-awaited India-EU trade deal, attention will quickly shift back to domestic policy. The Union Budget on Sunday will reveal how the Finance Ministry will balance the need for fiscal restraint with political pressure to spend as key state elections approach. After that, focus will turn to the RBI’s MPC meeting on 6th February where, in contrast to the consensus, we expect another 25bp cut to the repo rate.