Macro Forum: The Street View
INDIA MACRO INSIGHTS
In India, real GDP growth forecasts posted a marked slowdown in 2019 at 5%, from c.7% in the previous two years. Headline inflation rose from 3.3% in the first half of 2019 to 7.4% in December, driven by food prices. The government’s 2020 budget has shown a timely recognition of current challenges, with a reduction in how quickly and by how much it plans to reduce the fiscal deficit. Spending pledges and corporate tax cuts stand at Rs.27.5 trillion (c.US$400 billion) in 2019-20, nearly 20% higher than the provisional estimates for 2018-19.
Accommodative fiscal policy is further supported by the central bank, which announced a 110 basis point cut to the repo rate. However, risk aversion and high levels of bad debt in the banking sector are likely to continue to impede lending, somewhat restraining consumption and investment growth.
|Q2 2019||Q3 2019||Q4 2019||Q1 2020||Q2 2020|
Real GDP Growth
India FX vs FV
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