India chartbook: Holding out for a second half recovery

FY20 growth is likely to be sub-7% for a second straight year. After hitting a speedbump in 1Q19, growth is likely to soften into 1HFY20.
Radhika Rao24 Jul 2019
Photo credit: AFP Photo

• FY20 growth is likely to be sub-7% for a second straight year. After hitting a speedbump in 1Q19, growth is likely to soften into 1HFY20. Favourable base effects and lower rates might help to lift activities in the 2H

• Inflation has been creeping up but is benign due to a weaker core. Monsoon strength and oil are under watch. We have revised down the FY20 inflation forecast.

• With fiscal consolidation a priority and inflation below target, monetary policy has adopted an accommodative hue

• Despite a proposed offshore sovereign bond issuance, reserves adequacy remains comfortable at this juncture

• After a sharp rally, INR bond yields are set to consolidate

• A supported US dollar and active reserves accumulation have kept the rupee under pressure. We look for USDINR to drift north by year-end with INR faring better than its export-reliant Asian peers

To read the full report, click here to Download the PDF.

Radhika Rao

Economist – India, Thailand & Eurozone

The information herein is published by DBS Bank Ltd and PT Bank DBS Indonesia (collectively, the “DBS Group”). It is based on information obtained from sources believed to be reliable, but the Group does not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions expressed are subject to change without notice. Any recommendation contained herein does not have regard to the specific investment objectives, financial situation & the particular needs of any specific addressee. The information herein is published for the information of addressees only & is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. The Group, or any of its related companies or any individuals connected with the group accepts no liability for any direct, special, indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if the Group or any other person has been advised of the possibility thereof. The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services. The Group & its associates, their directors, officers and/or employees may have positions or other interests in, & may effect transactions in securities mentioned herein & may also perform or seek to perform broking, investment banking & other banking or finan­cial services for these companies. The information herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. Sources for all charts & tables are CEIC & Bloomberg unless otherwise specified.

DBS Bank Ltd., 12 Marina Blvd, Marina Bay Financial Center Tower 3, Singapore 018982. Tel: 65-6878-8888. Company Registration No. 196800306E. DBS Bank Ltd., Hong Kong Branch, a company incorporated in Singapore with limited liability. 18th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong.

PT Bank DBS Indonesia, DBS Bank Tower, 33rd floor, Ciputra World 1, Jalan Prof. Dr. Satrio Kav 3-5, Jakarta, 12940, Indonesia. Tel: 62-21-2988-4000. Company Registration No.