Key Points:
- Oxford Economics has indicated that the Indian Economy is seen recovering faster than expected.
- The firm, giving an estimated figure said that inflation is expected to average significantly above 6 percent in the fourth quarter of the current fiscal year.
- The retail inflation in September 2020 stood at 7.27 % and 7.61% in October.
Indian Economy has surged to extreme lows due to the ongoing pandemic that has hit the globe. The economy is running in negatives but, recently Union Minister Nirmala Sitharaman said that the Economy is getting back on track and supporting the same statement, the Oxford Economics has indicated that the Indian Economy is seen recovering faster than expected.
The Reserve Bank of India is likely to have come to an end of the rate easing cycle said Oxford Economics. The economy has been in strong recovery since the last two months amidst tackling the Covid-19 pandemic situation in the country.
The firm, giving an estimated figure said that inflation is expected to average significantly above 6 percent in the fourth quarter of the current fiscal year. The RBI may also hold policy rates in its December monetary policy review meeting.
The Oxford Economics said,
“Consumer inflation rose back to pre-virus highs in the month of October experiencing a rise in prices in every broad category except Fuel. While Q4 is likely to mark the peak for inflation, we have turned more vigilant over the 2021 trajectory.”
Keeping it up above the comfort zone of the Reserve Bank, vegetables and eggs have inflated price that pushed up retail inflation to nearly six-and-a-half-year high of 7.61% in October. The retail inflation in September 2020 stood at 7.27 %.
“At the same time, robust bottom-up activity data suggest that the economy may be recovering faster than we anticipated. As such, we see an increasing possibility that the RBI’s easing cycle has ended,”
Oxford Economics concluded.
