Aditi Nayar

The CPI inflation for Q3 FY2025 is expected to overshoot the MPC's estimate of 4.8 per cent for the quarter by at least 60-70 bps

On the personal income tax front, the Budget brought in some modest tweaks, which should support sentiment and consumption for salaried individuals

The Union Budget for fiscal 2024-25 (FY25) will be presented on July 23, 2024

The surge in the headline CPI inflation has expectedly proved to be transient. The print had cooled off to 6.8 per cent in August 2023 from the 15-month high of 7.4 per cent in July

It says once the global shocks of the pandemic and 2022's unpleasant spike in commodity prices fade away, the Indian economy is likely to record a faster growth during the rest of this decade

Another rate hike predicted for September 2022, even if the quantum is as small as 10 bps

With front-loaded rate hikes by the US Fed, the US dollar will remain relatively strong in the immediate term

The Governor's reminder that the repo rate is still below the pre-pandemic level served as a clear signal that more rate hikes lie ahead

The MPC has focused on preventing inflationary expectations from un-anchoring in an increasingly uncertain environment.

Next RBI monetary policy stance likely to be followed by shallow rate hike cycle, with the repo rate being increased by 25 bps each in August and September 2022.

While an adverse base was expected to flatten growth in the quarter from 8.5% in Q2FY22, NSO's initial estimates are sorely below our expectation of a 6.2% YoY expansion in that quarter

We remain cautious that reviving demand could embolden pricing power, allowing a faster transmission of the supply-side pressures to core inflation

Distorted base of last year's stringent nationwide lockdown obscured devastation of second wave of Covid-19 that came with staggered state-wise curbs in Q1 of current fiscal

The Governor clearly stated that the RBI remains in 'whatever it takes' mode, referring to the desire to support the fledgling recovery

The monetary policy stance is expected to remain accommodative for most of 2021, until a dramatic improvement in vaccine coverage quells uncertainty regarding the growth outlook

Overall, GDP and GVA contracted by 7.3 per cent and 6.2 per cent, respectively, in FY21, in line with our forecasts (-7.3 per cent and -6.3 per cent, respectively)

The disconcertingly sharp new wave of Covid-19 cases has reignited uncertainty regarding the economic outlook in the immediate term

GDP is implicitly projected by NSO to slip back into contraction of 1.1% in Q4FY21. This appears to be an outcome of the back-ended release in the Govt's subsidies that is on the anvil in Q4

The fiscal deficit of the government of India has increased sharply to 9.5 per cent of GDP in the Revised Estimates for FY21, relative to the budgeted target of 3.5 per cent

The package offers a variety of measures to boost capital spending and infra investment, incentivise job creation and also provide support to the farm and non-farm portion of the rural economy