With the weak GDP growth in the Jun-17 quarter, the debate on providing stimulus to the economy reemerged. However, the prospects of a rate cut had been dampened by the August CPI inflation print of 3.4%, which surprised on the upside.
Indeed, with inflation expected to rise closer toward the RBI's inflation target, we do not think there is much room to ease monetary policy further. Moreover, the potential fiscal easing would have to be evaluated in the context of its impact on inflation.
As private capex remains relatively subdued, it has been suggested that further easing (in
Indeed, with inflation expected to rise closer toward the RBI's inflation target, we do not think there is much room to ease monetary policy further. Moreover, the potential fiscal easing would have to be evaluated in the context of its impact on inflation.
As private capex remains relatively subdued, it has been suggested that further easing (in