'...over the long-term can be done only by investing in equities.' 'And during weak macros, one needs t1o allocate more than drawing it down, because they offer the best entry point.'
The Reserve Bank of India's (RBI's) State of the Economy report for October acknowledged a slowdown in some high-frequency indicators but expressed confidence in a recovery, aided by consumption demand during the festival season. "In India, aggregate demand is poised to shrug off the temporary slowdown in momentum in the second quarter of 2024-25 as festival demand picks up pace and consumer confidence improves," said the report released on Monday.
'The actions of Indian monetary authorities will depend on how quickly they want the inflation to come down to 4 per cent.'
The Reserve Bank of India on Thursday raised its inflation projection to 5.1-4.7 per cent for the second half of the current fiscal on the back of spike in prices of vegetables such as onion and tomatoes.
The Reserve Bank of India's rate-setting panel on Wednesday began its three-day deliberations on the next bi-monthly monetary policy amid expectations of at least a 35-basis-point hike in the interest rate to check high inflation. If raised, it will be the third consecutive hike in the repo rate -- the short-term rate at which the RBI lends money to banks. The central bank has already announced to gradually withdraw its accommodative monetary policy stance.
Food prices probably fueled a sharp rise in India's retail inflation in December after the record low struck the previous month.
In the month of May wholesale price inflation entered double digits and stood at 10.16 per cent.
Goyal said India has been recognised as brightest spot in the world in last five years.
The Reserve Bank of India (RBI) will maintain the policy repo rate at 6.5 per cent during its upcoming June 8 announcement, considering the easing of retail inflation in April and the potential for further decline, indicating the effectiveness of previous policy rate actions, anticipate experts. Headed by Reserve Bank Governor Shaktikanta Das, a meeting of the six-member Monetary Policy Committee (MPC) is scheduled for June 6-8. The decision of the 43rd meeting of the MPC would be announced on Thursday, June 8.
Indian economy is expected to clock an average growth rate of 6.7 per cent till 2026-27 fiscal driven by domestic consumption, S&P Global Ratings senior Economist (Asia Pacific) Vishrut Rana said on Wednesday. He said the economic growth in the current fiscal is expected to come in around 6 per cent, lower than 7.2 per cent clocked in 2022-23. "We are seeing some headwinds from the trade side which is affecting activity and that is one of the factors that is affecting growth this year," Rana said at a webinar.
'We may see even more restrictive policies during 2.0.'
Inflation rate in fuel and power segment was (-)16.50 per cent.
Brokerages expect a further slowdown in Indian firms' revenue and earnings growth in Q4FY25, following low single-digit growth in the preceding three quarters, as factors like weak consumer demand and credit growth linger on.
Wholesale fuel prices in May fell 10.51 per cent year-on-year.
Reserve Bank Governor Shaktikanta Das on Wednesday said the decision to tweak policy rates was not in his hand as he himself is driven by the situation on the ground. In April, the Reserve Bank in a surprise move hit the pause button and decided to keep the key benchmark policy rate at 6.5 per cent. Prior to it, the Reserve Bank of India (RBI) was on a rate hiking spree, raising the repo rate by 250 basis points since May 2022.
The RBI has targeted 6 percent inflation by January 2016
WPI inflation, which was in the negative zone from November 2014 to March 2016, has been on an upward trend for the seventh straight month
Fitch Ratings on Thursday slashed India's GDP growth projection for FY23 to 7 per cent, saying the economy is expected to slow against the backdrop of global economy, elevated inflation and high interest rate. In June, it had forecast 7.8 per cent growth for India. "We expect the economy to slow given the global economic backdrop, elevated inflation and tighter monetary policy. "We now expect the economy to grow 7 per cent in the financial year to end-March 2023 (FY23) from 7.8 per cent previously, with FY24 also slowing to 6.7 per cent from 7.4 per cent before," Fitch said in its September edition of the Global Economic Outlook.
In case of onions, inflation skyrocketed to 127.04 per cent, while for the eggs, meat and fish segment the rate of price rise was 5.76 per cent.
CPI inflation will remain below the target of 6 per cent set for January 2016.
Finance Minister Arun Jaitley on Saturday said that retail inflation is expected to remain close to 5 per cent
Inflation targeting has worked well and the government must stay with it, and the framework is going to work well in the period ahead also, former RBI Governor D Subbarao said on Thursday. He also said low inflation contributes to sustainable growth. Addressing the 'Times Network India Economic Conclave' virtually, Subbarao said the government's proposal to privatise some public sector units is not akin to selling family silver but it is a route for putting India on a sustainable growth path.
The Reserve Bank of India hiked key interest rates by 0.25 per cent each in the last two reviews to tame inflation.
The internals of the food inflation are worrying, given a broad-based uptick across categories that tend to be sticky, such as proteins, and a narrower-than-expected reduction in inflation for vegetables.
'Both IIP and CPI inflation numbers are showing a huge disconnect from the leading indicators.'
This is the second straight month of decline in wholesale price based inflation.
The rise in May Wholesale Price Index based inflation has been mainly on account of 31.44 per cent increase in prices of potato, 19.40 per cent in fruits and 12.75 per cent in rice.
Quarterly earnings of corporates, trading activity of foreign investors and inflation data are the key factors that are expected to drive the momentum in the equity markets this week, analysts said.
Driven by rising prices of food items such as sugar, pulses and vegetables as well as clothing, retail inflation moved closer to the double digit mark.
The ongoing second quarter earnings, movement of oil benchmark Brent crude and the uncertainty in the Middle East would dictate terms in the domestic markets this week, analysts said. Furthermore, the activities of Foreign Institutional Investors (FIIs) will also influence trading in the markets. "A slew of earnings reports from heavyweights expected this week will significantly impact market direction.
Concerned over elevated inflation, Reserve Bank of India on Friday decided to leave the benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance, implying more rate cuts in the future if need arises to support the economy hit by the Covid-19 pandemic.
A prime minister-appointed panel on inflation has pitched for opening FDI in multibrand retail in a 'properly regulated fashion', cautioning that the global corporations can also become monopolistic and hike prices.
India's consumer inflation should ease in the next two months, and will fall to 8 per cent by the end of the year, says RBI Governor Raghuram Rajan.
'Spending by the middle class is limited with a focus on savings. However, there is buoyancy at the top-end.'
Forex dealers said besides dollar's gains against other currencies, fresh demand for the American unit from importers and a weak opening in the domestic equity market put pressure on the rupee.
Inflation in food articles, fuel and power contracted in July.
It would also be the last policy of Rajan
The report on the alleged liquor scam, a hot button issue in the run-up to the elections, claimed a loss of revenue to the tune of Rs 941.53 crore, saying timely permissions were not taken for opening the liquor vends in non-conforming municipal wards.
With the earnings season drawing to a close, stock markets will take cues from global trends and foreign investors' trading activity this week, analysts said. The US FOMC (Federal Open Market Committee) minutes will be the major highlight this week, experts said. "This week, there are fewer cues on the macro and micro fronts, as the Q1 earnings season has concluded.
The government had amended the RBI Act through Finance Act 2016.
