Run-up to monetary policy: Neutral is best gear for now, says Sonal Varma

The divergence between low food and elevated core inflation continues

What a difference a few months can make. Four changes, in particular, stand out. 

A synchronised global growth slowdown is now clear. Trade tensions, fading US fiscal stimulus, the effects of Chinese deleveraging, a slowing tech cycle are few of the reasons. 

Led by the US, China and euro area, we expect global GDP growth to slow to 3.4 per cent in 2019 from 3.9 per cent in 2018. For now, this is a cyclical slowdown, but downside risks have risen. 

Whether a dovish shift in global policy will suffice in countering these risks remains to be seen. 

Second, notwithstanding the gyrations, oil prices