Perspective on RBI MPC Data by Ms. Madhavi Arora, Chief Economist, Emkay Global Financial Services
Below the Perspective on RBI MPC Data by Ms. Madhavi Arora, Chief Economist, Emkay Global Financial Services
“Despite sharply lowering its inflation forecast to 3.1% from 3.7% earlier, RBI’s decision to keep rates steady emanates from their focus on one-year-ahead expected inflation that’s looking comfortably above 4%, while growth in their view has held up well, despite global uncertainty. However, focusing on one-year-ahead expected inflation appears increasingly misplaced in an evolving world – particularly as the global landscape continues to shift toward a disinflationary bias in Asia. We think going ahead downside risks to growth would be increasingly evident with new global resets and could still open up space for easing in remainder of the year, even though the Governor seems to have raised the bar higher for further easing.”
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