Macrobook - Economic outlook

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Sep 02, 2022

India Macrobook Aug-22

FY23 GDP growth call maintained at 7.0% with possibility of some downside risk; FY23 CPI inflation forecast maintained at 6.5% with support from moderation in global commodity prices and pick up in monsoon; 

Estimates for FY23 current account deficit and Net BoP position maintained at USD 130 bn and USD -60 bn respectively; We expect 50 bps of cumulative hike in repo rate, spread over Sep-22 and Dec-22 policy reviews; We expect 10Y g-sec yield to trade between 7.20-7.60% range in the remainder of FY23; We maintain our USDINR call of 81 before the end of FY23 amidst BoP pressure and broad-based dollar strength; India’s inclusion in global bond indices could provide downside risk to bond yields and USDINR