According to the most recent Bloomberg survey, economists anticipate that India’s central bank will raise interest rates by December, bringing the repurchase rate to 6% by the end of this year.
A further 35 basis point increase in the September monetary policy review and a quarter-point increase in December, bringing the main interest rate to 6%, are projected by economists after a total of 140 basis points have been raised in three moves since May. According to a previous study, the repo rate would increase to 6% by the end of June 2023.
The rate hike expectations come despite economists predicting a moderated inflation due to a drop in global commodities and the alleviation of supply chain bottlenecks.
Consumer prices are expected to fall to 6.6% from 6.76% in the fiscal year ending March 2023 but remain above the central bank’s 2%-6% target range. According to the survey, wholesale prices are expected to fall to 10.95% before falling to the low single digits in the next fiscal year through March 2024.
Meanwhile, gross domestic product is expected to rise 15.3% year on year in the three months to June, while gross value added is expected to rise 14%. According to the same survey, growth may slow to less than 6% in the July-September quarter as a result of global concerns.
