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The overnight strikes by Israel on Iran mark a major escalation in the conflict in the region and, with the oil market tighter than it was a few months ago, the risks to oil prices look more balanced than we’d previously thought (rather than skewed to the …
13th June 2025
Our Q3 India Outlook This week we published our Q3 India Economic Outlook , which contains all of our latest analysis of India’s economy and financial markets. The forecasts and underlying data can also be viewed in our interactive India Macro Dashboard …
Headline inflation drops to 75-month low; has now bottomed out India’s headline consumer price inflation fell to a 75-month low of 2.8% y/y in May. Inflation may now have bottomed out, but we think it will rise only very gradually back towards the Reserve …
12th June 2025
Note: we will be online to discuss India’s macro and markets outlook and to take your questions at 9am BST/4.00pm SGT on Tuesday, 10 th June. Register for the event here . Overview – India’s economy has had a strong first half of the year and is poised …
9th June 2025
Rapid economic growth ≠ equity outperformance Data released this week suggest the economy has carried its recent momentum into Q2. Although May’s composite PMI output balance fell slightly, it remained firmly in expansionary territory. (See Chart 1.) This …
6th June 2025
The Reserve Bank of India’s (RBI’s) decision to cut the repo rate by a larger-than-expected 50bps (to 5.50%) while also changing its policy stance from “accommodative” to “neutral” today are clear indications that it has frontloaded the remainder of the …
RBI ends easing cycle with a bang The Reserve Bank of India’s (RBI’s) decision to cut the repo rate by a larger-than-expected 50bps (to 5.50%) while also changing its policy stance from “accommodative” to “neutral” today are clear indications that it has …
India’s stock market has fared well this quarter, outperforming other emerging market equities in aggregate, but we doubt this bout of outperformance will last in the near term. The good times seem to be back for India’s stock market, after a few months …
5th June 2025
Higher GDP forecasts for 2025 and 2026 Data released today confirmed that the economy got off to a strong start in 2025 – GDP growth rose to 7.4% y/y, from 6.4% y/y in Q4 2024 (revised up from 6.2%). (See here for our Data Response .) Looking ahead, it’s …
30th May 2025
Economy grew at a rapid pace in Q1 GDP figures for Q1 2025 show that India’s economy grew at a robust pace at the start of the year and we think that growth may remain strong over the coming quarters as lower interest rates filter through into the economy …
This report is part of our Future of Europe series. Read more analysis, explore the supporting data, and learn about our broader European coverage on the dedicated Future of Europe page. Europe is being buffeted by geopolitical and geoeconomic shifts but, …
In this Update, we answer several key questions about how the US Court of International Trade (CIT) tariff ruling might affect the US and other economies. The outlook may now rest on the decision of the Republican-stacked Supreme Court. The upside risks …
29th May 2025
Falling inflation, downside risks to growth to prompt another cut to repo rate next week Another 25bp cut to 5.75% seems most likely Consensus has caught up to our long-held view of 100bps of cuts in this cycle With headline inflation now at a …
Debate around whether or not India’s economy has surpassed Japan’s in size is raging, but the big picture is that India was always going to overtake Japan – and also Germany – given its positive demographics and scope for continued productivity gains. So …
28th May 2025
RBI to transfer record dividend The RBI today announced a dividend transfer of INR2.7trn (US$34bn, 0.8% of GDP) to the Finance Ministry for FY24/25 (which ended in March). This is a record amount in both INR terms and relative to GDP, and exceeds the …
23rd May 2025
India’s economy is emerging from its soft patch. Headline CPI inflation should remain close to the RBI’s 4% target over the coming months, enabling the central bank to continue easing monetary policy. We’re expecting a further 50bp of cuts to the repo …
22nd May 2025
Core inflation in India rose to an 18-month high in April, but there are reasons to think that this overstates the extent to which the economy is running into capacity constraints. And with headline inflation at a multi-year low, further policy easing …
21st May 2025
A deal is perhaps not so imminent Optimism that India was poised to seal a quick trade deal with the US has faded in the past week. Admittedly, Donald Trump still sounds positive about the negotiations – he claimed yesterday that India had offered a “no …
16th May 2025
The recent climbdown has left the effective US tariff rate on the rest of the world at around 15% as opposed to the 27% which was threatened at the height of this year’s trade war. While this is still the highest since the 1930s, it is unlikely to cause a …
13th May 2025
Inflation at six-year low strengthens case for more interest rate cuts The slight fall in India’s consumer price inflation in April, which pushes it further below the Reserve Bank of India’s (RBI’s) 4% target, supports our view that the central bank will …
Global Trade Stress Monitor …
The US and China have each suspended for 90 days all but 10% of their Liberation Day tariffs and cancelled other retaliatory tariffs. This is a substantial de-escalation. However, the US still has much higher tariffs on China than on other countries and …
12th May 2025
Market jitters, but limited economic impact News this week has been dominated by the fallout from India’s strikes on suspected terrorist camps in Pakistan in retaliation to the 22 nd April attacks in Pahalgam. This has sent a few jitters through financial …
9th May 2025
If limited just to Kashmir, a period of fighting between Pakistani and Indian forces would have a small impact on the economy of either country. Pakistan would have more to lose than India from a broader conflict, though that would also risk reversing the …
7th May 2025
Exporters relatively well-placed to benefit US Treasury Scott Bessent said this week that “India would be one of the first trade deals we [the US] would sign”, brightening the prospects of India avoiding large tariffs once the 90-day reprieve comes to an …
2nd May 2025
A robust monsoon this year – as predicted by experts – wouldn’t have as big an impact on India’s economy as it would have had a couple of decades ago. But it could boost employment and energy production. What’s more, it would anchor prices of key crops …
30th April 2025
India’s economy is emerging from its recent soft patch. Headline CPI inflation should remain close to the RBI’s 4% target over the coming months, enabling the central bank to continue easing monetary policy. We’re expecting a further 50bp of cuts to the …
29th April 2025
Parts of South East Asia, notably Vietnam, as well as India are well placed to immediately gain market share in response to penal US tariffs on Chinese imports. But uncertainty over the future tariff landscape will deter investment in additional capacity …
Provided it was limited just to Kashmir, a period of fighting between Pakistani and Indian forces would have a small impact on the overall economy of either country. The closing of the only land trade route is also largely symbolic – bilateral trade was …
28th April 2025
Trump policies may be levering India towards US US Vice President JD Vance hailed “very good progress” on a potential trade deal between Washington and New Delhi during his visit to India this week, and prospects do appear to have brightened with the two …
25th April 2025
Pharmaceuticals tariffs incoming A US import levy on pharmaceuticals would be a blow to India’s economy but far from a fatal one. Admittedly, India has been dubbed the “pharmacy of the world” and its success in the industry has helped its pharmaceuticals …
17th April 2025
Further fall in inflation paves way for more interest rate cuts The larger-than-expected fall in Indian consumer price inflation in March, which pushes it further below the Reserve Bank of India’s (RBI’s) 4% target, reinforces our view that the central …
15th April 2025
Opportunities for India amid tariff chaos All of our analysis of the latest twists and turns in the trade war – notably President Trump’s decision to postpone reciprocal tariffs (bar China) for 90 days – can be found here . Of course, things are subject …
11th April 2025
President Trump’s trade war has created material downside risks for the global economy. Our forecasts assume that tariffs on most countries outside China will stay at 10% and retaliation by other governments will be moderate. In this scenario, global GDP …
10th April 2025
The Reserve Bank of India’s (RBI’s) decision to cut the repo rate by another 25bps today to 6.00% comes as no surprise given the recent sharp drop in inflation and the headwinds from US tariffs. But the dovish tone of the communications reinforces our …
9th April 2025
RBI’s easing cycle will run further than most expect The Reserve Bank of India’s (RBI’s) decision to cut the repo rate by another 25bps today to 6.00% comes as no surprise given the recent sharp drop in inflation and the headwinds from US tariffs. But the …
Near-term hit from tariffs for India won’t be big Our response to the Liberation Day tariff announcements includes analysis of the global macro impact here , the financial market impact here , online briefings that can be viewed on demand here and various …
4th April 2025
We hosted two online Drop-In sessions on 3 rd April to discuss the fallout from President Trump’s Liberation Day tariff announcement. (See a recording here .) This Update contains answers to some of the questions that we received and links to several more …
3rd April 2025
Falling inflation will prompt another cut to repo rate next week, regardless of tariffs Another 25bp cut to 6.00% seems most likely We expect more cuts in this cycle than the consensus is forecasting The recent sharp drop in headline CPI inflation means …
1st April 2025
Concessions to Trump may not prove enough All eyes are now on the Trump administration’s reciprocal tariff plans, due to be unveiled on Wednesday 2 nd April. There is still huge uncertainty around what form reciprocal tariffs will take. The administration …
28th March 2025
In this Update, we answer several key questions about how the announced 25% tariffs on US imports of autos and parts might affect the global economy and the US itself. Mexico, Slovakia and Korea are most exposed with up to 1.6% of GDP at risk. But the …
27th March 2025
It is becoming clear that President Trump’s actions are driven by both his fixation on reducing the US trade deficit and his transactional approach to dealing with other countries. So, even though the Trump administration’s ideas to transform the entire …
25th March 2025
Equity jump unlikely to be start of sustained rally At the time of writing, India’s benchmark Sensex stock index has risen by 4% this week, making it its best week in almost three years. The big picture, however is that the Sensex is still 11% off its …
21st March 2025
India has long had a relatively protectionist trade policy but, driven in part by the reciprocal tariff threat from the US, there appears to be a slight shift in approach from policymakers. Import duties on certain goods are being lowered as concessions …
20th March 2025
India’s economy is emerging from its recent soft patch. Headline CPI inflation should remain close to the RBI’s 4% target over the coming months, enabling the central bank to continue easing monetary policy. We’re expecting a further 75bps of cuts to the …
Key risks: food prices, banks, tariffs This week we published our Q2 India Economic Outlook , which contains all of our latest analysis of India’s economy and financial markets (the forecasts and underlying data can also be viewed in our interactive India …
14th March 2025
Further easing in inflation leaves door open to more rate cuts The larger-than-expected fall in Indian headline consumer price inflation to below the RBI’s 4% target in February supports our view that the central bank will continue to loosen monetary …
12th March 2025
Overview – India’s economy is emerging from its recent soft patch. Headline CPI inflation should remain close to the RBI’s 4% target over the coming months, enabling the central bank to continue easing monetary policy. We’re expecting a further 75bps of …
11th March 2025
US may be seeking more market access It’s been another eventful week on the tariff front, with the Trump administration going ahead with 25% tariffs on Canada and Mexico (as well as an additional 10% on China) on Tuesday before then announcing carve outs …
7th March 2025
The events of the past two weeks have called into question whether the US is severing ties not just with adversaries such as China but also allies, including Canada, Mexico and the European Union. This would radically alter the shape of the fractured …
4th March 2025
