Archive

No Alarm From Global Cycle

• Broad increases in the flash services PMIs reinforced the signal that global activity remains resilient enough not to require forceful monetary easing.
• Residual seasonality hasn’t appeared in the PMIs again this summer, but it pollutes some unemployment data. A slight majority of countries have a higher UR than a year ago.
• Softening labour market trends from a relatively neutral cyclical position are consistent with gradual and limited rate cuts, even if they need reversing without a recession.

By Philip Rush

India CPI Inflation 4.75% y-o-y (consensus 4.9%) in May-24

- India’s CPI inflation for May 2024 stood at 4.75% y-o-y, below the consensus forecast of 4.9%, marking the lowest growth since May 2023.
- Slowing CPI inflation and subdued wholesale price movements, particularly in the manufacturing sector, suggest a potential easing of inflationary pressures, offering economic relief and implications for monetary policy adjustments.

India CPI Inflation 4.83% y-o-y (consensus 4.8%) in Apr-24

- India's CPI inflation in April 2024 was broadly in line with expectations and the previous month at 4.83% y-o-y.
- However, this growth represents the lowest inflation rate since May 2023 and is below both the one-year average and long-run average, which could have significant implications for economic policies and decision-making.

India Policy Rate 6.5% (consensus 6.5%) in Feb-24

• The Reserve Bank of India (RBI) has opted to maintain the Policy Rate at 6.5%, in line with economic forecasts, signalling a cautious approach to balancing growth and inflation within its target range.
• Despite a recent uptick in inflation, the MPC's decision reflects confidence in the underlying strength of the domestic economy and the effectiveness of previous monetary policy adjustments.
• Future policy decisions on interest rates will hinge on inflation trends, the impact of global economic developments, and ensuring the transmission of monetary policy while supporting sustainable economic growth.