Political risks to rate cut, what India's women economists predict for 2019

Economy & Policy:

India’s economy, among the world’s fastest growing, faces risks from a global slowdown and political instability after a national election. That’s the view of the top women economists covering the nation.

Slower growth and benign inflation will boost chances of back-to-back interest rate cuts by the Reserve Bank of India in April, according to the three analysts, who are ranked among the most accurate female forecasters in Bloomberg surveys on growth and inflation. The rankings are based on two years of contributed surveys.

Political risks are also intensifying as tensions with Pakistan mount and Prime Minister Narendra Modi’s re-election bid gets more heated.

Here’s a look at what the economists expect for the rest of the year:

Sonal Varma

Chief India Economist, Nomura Holdings Inc.

Top woman forecaster for quarterly gross domestic product
Growth: Weaker global demand will affect everything from India’s exports to manufacturing, Varma said, while tight financial conditions will hurt domestic demand and political uncertainty will delay investment decisions. She forecast growth of 6.8 percent in the fiscal year starting April versus Reserve Bank of India’s 7.4 percent.


 Interest Rates: “The Reserve Bank reaffirmed its focus towards headline inflation and its willingness to support growth, which suggests the February policy cut was not a ‘one and done’,” Varma said. Based on her assessment of slower growth and inflation remaining below RBI’s projection, she expects another rate cut in April of 25 basis points...Read More