The Reserve Bank of India (RBI) is widely seen raising its key lending rate by 35 basis points today as inflation continues to stay above its tolerance band but markets will be looking to its outlook on growth and prices for direction.
A strong two-thirds majority in a Reuters poll said it was still too soon for the central bank to take its eye off inflation, which slowed to 6.77% in October but has stayed above the upper end of the RBI’s 2-6% tolerance band all year.
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The World Bank revised upwards its GDP growth forecast for India to 6.9 per cent for 2022-23, saying the economy was showing higher resilience to global shocks.
In its India Development Update, the World Bank said the revision was due to the higher resilience of the Indian economy to global shocks and better-than-expected second-quarter numbers.
The Indian rupee has fared relatively well in 2022 in comparison to other emerging market peers, senior World Bank economist Dhruv Sharma said on Tuesday after the World Bank revised India’s GDP (gross domestic product) forecast to 6.9 per cent. Read here.
The central government is on track to meet its fiscal deficit target of 6.4 per cent of the GDP for 2022-23 on the back of strong growth in revenue collections, the World Bank said in its India Development Update on Tuesday.
High nominal GDP growth in the first quarter supported strong growth in revenue collection, especially Goods and Services Tax (GST), despite tax cuts on fuel.Read here.
The World Bank on Tuesday said it expects inflation to be 7.1 percent in the current fiscal year and added that the decline in commodity prices could dampen inflationary pressures.
India’s October inflation dropped to 6.77 per cent, from 7.41 per cent in the preceding month, mainly due to easing prices in the food basket, though it remained above Reserve Bank’s comfort level for the 10th month in a row. Read here.
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