The Indian economy is expected to recover faster than expected and the Reserve Bank has likely reached the end of the rate easing cycle, according to global forecasting firm Oxford Economics.
Furthermore, he said that inflation is expected to average significantly above 6 percent in the fourth quarter of the current fiscal year and that the RBI could maintain interest rates at the December monetary policy review meeting.
“Consumer inflation rose again to pre-virus highs in October, and nearly all broad categories except fuel saw prices rise. While the fourth quarter is likely to mark the peak of inflation, we have become more cautious on the trajectory during 2021. ” He said.
The most expensive vegetables and eggs pushed retail inflation to a nearly six-and-a-half-year high of 7.61 percent in October, keeping it significantly above the Reserve Bank’s comfort zone. Retail inflation stood at 7.27% in September 2020.
“At the same time, strong data from upward activity suggests that the economy may be recovering faster than we anticipate. As such, we see a growing possibility that the RBI’s easing cycle is over,” said Oxford Economics.
Moody’s Investors Service has also revised up its GDP forecast for India to (-) a contraction of 8.9 percent in calendar year 2020 as the economy reactivates after a long and strict national lockdown, but added that recovery is spotty.
(Business Standard staff may have only modified the title and image of this report; the rest of the content is automatically generated from a syndicated feed.)
Dear reader,
Business Standard has always strived to provide up-to-date information and commentary on developments that interest you and that have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only strengthened our determination and commitment to these ideals. Even during these difficult times arising from Covid-19, we remain committed to keeping you informed and up-to-date with credible news, authoritative opinions, and incisive commentary on relevant current affairs.
However, we have a request.
As we fight the economic impact of the pandemic, we need your support even more so that we can continue to bring you more quality content. Our subscription model has received an encouraging response from many of you, who have subscribed to our content online. Increased subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital editor
.
