The main message from our Q4 India Economic Outlook published this week is that while punitive US tariffs will weigh on growth over the coming quarters, India is likely to remain a relative bright spot in the global economy. Meanwhile, the August inflation data published today confirm that the headline CPI rate has bottomed out, but we think it will rise only gradually back towards the 4% target over the coming months. That leaves scope for the RBI to cut the repo rate by a further 50bps this year, taking it down to 5.00%.
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