Shift from rates to managing the emerging Quadrilemma

Topics Indian Economy | RBI | forex market

The evolving and expected paths of growth recovery and inflation will inevitably lead to the MPC unanimously voting for a pause in the forthcoming review. Given the GDP prints for the first 2 quarters, we expect that the full FY21 growth to contract at around 7.5 per cent, with probability of a stronger recovery, based on the set of leading indicators which we track.  Based on food and industrial metals price trends, CPI headline inflation, on the other hand, is likely to average 6.3 per cent in H2, significantly higher than RBI October forecast of 4.5-5.4 per cent. While the dynami.....

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