Macro-economic fundamentals: archives

Experts speak

Pre April 2018

  • Union Budget Quote: "The FM, unlike last year, did not discuss the headwinds that may impact the economy in 2018. The impact on inflation due to rising crude prices and higher in MSPs may make the central bank more hawkish as it would like to analyse the final impact of these variables. As such, this increases the likelihood of some kind of tightening towards the end of the current calendar year."
    ~ Richa Gupta
  • Union Budget: "The FM appears to have accepted the need to have a more proactive fiscal policy. The target for the next year has been relaxed to 3.3% for fiscal deficit, even though there is an expectation of stabilizing GST revenues along with buoyant disinvestment proceeds. In a scenario of rising crude oil prices and rising MSPs, it becomes critical that all schemes are implemented timely and the projection of better incomes and growth is realized."
    ~ Richa Gupta
  • CPI: "Consumer price inflation has moved up on expected lines and is likely to inch up in the coming months. As such, inflation has risen on the back of a base effect as the overall index has fallen from the previous month’s level. The current print is unlikely to lead to any major change in the RBI’s stance in the near term as inflation is likely to head downwards in the second half of the year once the unfavorable base effects wane. That said, energy and commodity prices could exert some pressure if global growth momentum pricks up from current levels."
    ~ Richa Gupta
  • Mid-year economic survey: "The mid-year projections are more in line with our forecasts as we are expecting growth to print in the 7-7.3% handle for the full year. As such, some disruption in economic activity was expected on account of the new taxation regime and the economy would take some time to return back to full steam. On the inflation front, expect the Central Bank to be data dependent with the next few months being crucial in gauging price pressures in the economy. We can expect some more policy action if inflation numbers continue to undershoot the RBI’s estimates." 
    ~ Anis Chakravarty
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