The government in India is optimistic about its prospect for positive growth this year. The country’s prime minister says there’s still uncertainty around those numbers, which leaves exchange traded funds (ETFs) in a state of limbo.
The government is expecting between 6.25% and 7.75% growth this year. That’s in line with the Reserve Bank of India, which upgrading its overall view. One concern is a growing fiscal deficit, which will make it challenging for the government to do much more to jump-start the economy.
A slump in agriculture and a weak monsoon season may create more inflationary pressure, especially for food, reports Elffie Chew for The Wall Street Journal. A drop-off in the agriculture sector would put even more pressure on the government to step in with a fiscal stimulus measures.
The Central Bank of India left rates unchanged this week, as expected. Ashok Sharma for BusinessWeek reports that the bank kept the repo rate for short-term loans to commercial banks unchanged at 4.75 % and the reverse repo rate — the rate it pays to banks when absorbing funds from the financial system — unchanged at 3.25%.
Business confidence in India is up, as signs of life are stirring in the Indian economy.
- WisdomTree India Earnings (EPI): up 63.7% year-to-date
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.