The RBI is scheduled to announce its next rate decision on Oct. However, low food and energy prices will keep India's price pressures below the 4 per cent mid-point of the RBI's medium-term target, according to Moody's Analytics. He lowered India's growth estimate for the year through March 2018 to 7 per cent from 7.5 per cent.ĭata on Thursday is expected to show wholesale price inflation accelerated to 3.15 per cent in August from 1.9 per cent the previous month, indicating pipeline pressures are building. "Between a negative shock to growth from fiscal tightening and risks of fiscal slippage, we think that the government may consider the latter given an already fragile macro environment," said Samiran Chakraborty, an economist at Citi. That may push Prime Minister Narendra Modi to boost spending, imperiling the budget deficit target, as well as compel the Reserve Bank of India to cut interest rates in the final quarter of 2017, according to Citigroup Inc. The data comes at a time when India's economic expansion has slumped to the lowest since 2014 as a November cash ban and new nationwide sales tax hamper activity. Industrial production, also due Tuesday, is estimated to have grown 1.7 per cent in July, better than June's contraction yet well below the 10-year average of 4.9 per cent.
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