Growth recovering, inflation sticky in India, Morgan Stanley believes a cycle has ended
The RBI revised its growth forecast upward to a contraction of 7.5%YoY from -9.5%YoY in F2021, as it now expects growth to turn positive in 2HF2021. On the inflation front, the outlook turned adverse as core inflation remains sticky due to cost push factors. RBI expects inflation to remain above the upper threshold of the MPC's target at 6.8% in Q3F2021 then decelerate to 5.8% in Q4F2021, with risks broadly balanced.
RBI expects inflation to remain above the upper threshold of the MPC's target at 6.8% in Q3F2021 then decelerate to 5.8% in Q4F2021, with risks broadly balanced: Reuters