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The economy is on course to grow by 6.5-7% per year between 2024 and 2026, which would put India on course to become the world’s third-largest economy in the next couple of years. Headline CPI inflation is likely to have accelerated in August, but it …
27th August 2024
RBI Governor pushes back against change to target A longstanding debate in Indian policymaking circles over which measure of consumer price inflation the RBI should target has been reignited in recent weeks. In the Government’s Annual Economic Survey …
23rd August 2024
Regulator comes under fire in Adani Group saga The Adani Group/Hindenburg Research saga took a new twist this week, 18 months after the publication by the US short-seller alleging “brazen stock manipulation and account fraud over the course of decades” …
16th August 2024
Signs of a thaw in frosty relations between India and China don’t point to a fundamental realignment in India’s position in a fracturing global economy. But they highlight a growing theme of some EMs tactically courting investment from China to put …
13th August 2024
This page has been updated with additional analysis since first publication. Disinflation back on track The drop in headline consumer price inflation to a one-year low in July should reassure the RBI that June’s surprise jump was a one-off and that the …
12th August 2024
Our Asia team will be holding a Drop-In on Wednesday 14th August at 0830 ET/1330 BST to discuss the timing of Asian interest rate cuts and the impact of global markets volatility. Register here for the 20-minute online briefing. Weakening against a weak …
9th August 2024
The recent market turmoil didn’t move the needle for the MPC today: it continued to strike a hawkish tone as the majority of members voted to keep the repo rate unchanged at 6.50%. But with inflation set to fall back towards the RBI’s 4% target over the …
8th August 2024
RBI could ease policy by year-end The recent market turmoil didn’t move the needle for the MPC today: it continued to strike a hawkish tone as the majority of members voted to keep the repo rate unchanged at 6.50%. But with inflation set to fall back …
Fears of a US recession have rattled EM equity markets at a time when EM economies themselves are showing more pronounced signs of weakness. Most EM currencies have held up well, suggesting a dovish tilt may come from EM central banks – particularly those …
5th August 2024
Bond restrictions highlight investor wariness The Reserve Bank of India (RBI) this week announced restrictions on foreign investment on all newly-issued 14-year and 30-year local-currency sovereign bonds. Effective immediately, foreigners will now only be …
2nd August 2024
Upside inflation surprise in June has dashed hopes of rate cut next week But space for December rate cut will open as inflation heads back down to 4% We think upcoming loosening cycle will be more aggressive than consensus expects The upside inflation …
1st August 2024
Budget shows focus on employment for Modi 3.0 The government presented the FY24/25 Union Budget on Tuesday, in which it managed to further lower the deficit target while largely fulfilling the spending demands of the BJP’s new coalition partners. We …
26th July 2024
Strong public investment growth alongside overall fiscal prudence have contributed to the rallies in India’s bond and stock markets over the past couple of years. However, we don’t see much in the latest budget to revise our view that gains in the coming …
The economy is primed to grow by 6.5-7% per year between 2024 and 2026, which would put India on course to become the world’s third-largest economy within the next couple of years. Headline CPI inflation will gradually fall over the coming months, …
24th July 2024
Finance Minister Nirmala Sitharaman has shown a commitment to fiscal consolidation while for the most part placating the BJP’s coalition partners in today’s FY24/25 Union Budget announcement. There is always a chance of fiscal slippage, but recent success …
23rd July 2024
Full Budget a key test for new government For India watchers, the Union Budget announcement on Tuesday 23 rd July will be one of the key economic events this year. In election years, the Union Budget takes place later than normal and often contains new …
19th July 2024
The upside surprise to headline consumer price inflation last month has all but ended hopes of a rate cut at the RBI’s August policy meeting. But we think that the conditions will be in place for policy loosening to begin in December. To recap, headline …
16th July 2024
Surprise inflation jump scuppers August rate cut hopes The surprise jump in headline consumer price inflation last month will be enough to convince any MPC members who may have been leaning toward rate cuts at the August policy meeting that conditions are …
12th July 2024
Full Budget a key test for new government The Finance Ministry confirmed this week that the full Union Budget for FY24/25 will be unveiled on Tuesday, 23 rd July (recall that during election years, an “interim” Budget is held in February). We’ll be …
Much of the strength of India’s external position over recent years can be explained by robust growth in its services exports, in particular its business process outsourcing (BPO) sector. The near-term outlook for the sector is bright. But the sector also …
9th July 2024
Final preparations are reportedly in place for Prime Minister Modi to travel to Moscow early next week to meet his Russian counterpart Vladimir Putin. This will be Modi’s first trip to Russia since the invasion of Ukraine, though the two leaders did meet …
5th July 2024
This page brings together our analysis of how Donald Trump's return to the White House will affect the outlook for emerging economies. Use the Table of Contents on the right to navigate. All of our analysis on the election, including the implications for …
28th June 2024
More to plunge in inward FDI that meets the eye The Q1 2024 Balance of Payments data released this week has refocused attention on the slump in net foreign direct investment (FDI) inflows. In the four quarters to Q1, net FDI inflows dropped to US$26.5bn, …
Prime Minister Modi begins his third term with a weakened mandate, but an economy that is primed to grow by 6.5-7% per year between 2024 and 2026. That would put India on course to become the world’s third largest economy within the next couple of years. …
25th June 2024
Bond index inclusion a positive for government… The Indian government’s long-awaited ambition to have its local currency bonds included in global indices will finally come to fruition next Friday when JPMorgan Chase adds the country to its GBI-EM Global …
21st June 2024
Overview – Prime Minister Modi begins his third term with a weakened mandate, but an economy that is primed to grow by 6.5-7% per year between 2024 and 2026. That would put India on course to become the world’s third largest economy within the next couple …
20th June 2024
Prime Minister Modi’s third term got underway this week with the selection of the new cabinet. 25 of 30 cabinet ministers are unchanged from the previous government, including all of those in key roles. (The remaining five spots have been freed up for the …
14th June 2024
This page has been updated with additional analysis since first publication. Inflation cooler than most expected Consumer price inflation came in cooler than most expected last month, which should reassure the RBI as it considers when to begin its easing …
12th June 2024
The ramp-up in public capital expenditure in the last five years has helped to ease some of the bottlenecks that had previously acted as a constraint on India’s economy. Despite the Modi government’s weakened electoral mandate, there are good reasons to …
11th June 2024
Equities up at the end of an extraordinary week The dust is settling on an extraordinary week for domestic politics and financial markets. Equities rallied on Monday (See Chart 1) following the release of election exit polls at the weekend pointing to a …
7th June 2024
The RBI kept the repo rate on hold at 6.50% today as expected but, notably, two of out of the six MPC members voted for a cut. With inflation likely to continue falling over the coming months, we maintain our long-held view that the easing cycle will …
RBI still on course for August rate cut The RBI kept the repo rate on hold at 6.50% today as expected but, notably, two of out of the six MPC members voted for a cut. With inflation likely to continue falling over the coming months, we maintain our …
India’s election result isn’t, in our view, reason to turn downbeat on the country’s equity market, its wobbles earlier this week notwithstanding. But with a very positive story seemingly still priced in to India’s equities, both on the political and …
6th June 2024
Narendra Modi will begin his third term as India’s Prime Minister with a weakened mandate and that will make the passage of contentious economic reforms more difficult. But he will still be able to work as the head of a stable coalition, and the broader …
4th June 2024
Modi on the brink Narendra Modi appears well on course for a third consecutive term as India’s Prime Minister according to exit polls that project another big parliamentary majority for the BJP. Admittedly, exit polls have a patchy track record in India …
2nd June 2024
This page has been updated with additional analysis since first publication. Economy booming on eve of election The GDP figures for Q1 confirm that India’s economy slowed a touch at the start of the year but was nonetheless still booming on the eve of the …
31st May 2024
Will PM Modi secure another majority? Voting in India’s seven-week election extravaganza ends tomorrow, and results are due to be announced on Tuesday 4 th June. Clients can see all of our election insights here . We will also be discussing the election …
Repo rate on hold at 6.50% next week, but MPC to drop its hawkish policy stance That should set the stage for an August rate cut We think rate cuts will be a bit more aggressive this year than consensus forecasts The Reserve Bank of India (RBI) will …
30th May 2024
The mammoth general election is entering its final week, with just 115 of the 544 constituencies left to vote before the result is announced on 4 th June. Clients can see all of our election insights here . We will also be discussing the election result …
24th May 2024
India has made impressive progress in raising its share of global high-end electronics exports over the past few years. But, worryingly, it has failed to capture any additional market share in the lower-end manufactured goods which are typically more …
23rd May 2024
India has been the star performer among major EMs over the past several quarters and the latest data suggest that the strength of economic activity has continued through to the general election. Headline inflation is grinding back to the RBI’s 4% target …
20th May 2024
Non-aligned policy to be tested in US-China divide This week we took a deep-dive into a topic that regularly comes up in our conversations with clients: how India positions itself in a fragmenting global economy. (See here .) Our analysis makes the point …
17th May 2024
India is benefitting economically from maintaining its historical non-aligned stance in response to tensions between the West and Russia, and Iran to a lesser extent. But notwithstanding a potential universal tariff on all US imports under a second Trump …
16th May 2024
This interactive dashboard allows you to explore all of our forecasts and key macroeconomic data for India. If you have subscriber access to the data underlying this redesigned dashboard, you can download it via the menu options in the top right of each …
This note answers some of the most frequently asked questions that we received from clients during a recent online briefing about the latest US tariffs on China. Watch the original briefing here . What has been announced? Yesterday was the end of a …
15th May 2024
This page has been updated with additional analysis since first publication. Inflation edging closer to RBI’s 4% target Headline consumer price inflation edged down in April to an 11-month low and, looking ahead, we think it will reach the RBI’s 4% …
13th May 2024
Sticking to Q3 call despite shifting consensus The latest poll from Bloomberg published this week show that the consensus is now expecting the RBI to begin its easing cycle in Q4. It is now forecasting 50bps of cuts by the end of the year, which would …
10th May 2024
Extreme heat across parts of India could be particularly damaging to the agriculture sector through both a drop in crop yields and a fall in labour productivity. But industry and services aren’t immune; a surge in demand for electricity to power cooling …
9th May 2024
Trump’s return could benefit India With Donald Trump’s protectionist approach to trade on full display in an interview with the Time magazine this week, what might the implications of a second Trump presidency be for India? India is not as dependent on US …
3rd May 2024
All the signs suggest that a second Trump administration would take a more protectionist approach to trade. Export demand in Mexico, East Asia and ASEAN would be particularly hard hit by a universal US import tariff or a dollar devaluation, and those …
29th April 2024
