The Importance of the September 2014 Monetary Policy

Posted by: Deepa Vasudevan on Wed, Oct 1st, 2014

The September 2014 monetary policy clearly signals that RBI will focus on controlling inflation. Its willingness and ability to reduce interest rates will depend on government actions towards supply side reforms, fiscal consolidation and measures to revive the investment cycle. Read more

The Statistical Truths in GDP growth

Posted by: Deepa Vasudevan on Fri, Sep 12th, 2014

Real GDP grew by 5.7% during the quarter April-June 2014, at the highest quarterly growth rate since 2012. However, as the economy emerges from several quarters of poor growth, it is important to recognize the impact of a low base in giving a statistical boost to GDP growth. Read more

Can Bank Credit Provide Enough Impulse to Investment?

Posted by: Deepa Vasudevan on Wed, Sep 3rd, 2014

The change in the flow of bank credit, or credit impulse, is better able to predict recoveries from a recession as compared to other credit variables. Data shows that though bank credit growth is poor, the credit impulse is rising. This suggests a strong possibility of a revival in investment. Read more

The Fiscal Deficit: How Achievable is it?

Posted by: Deepa Vasudevan on Fri, Jul 18th, 2014

The Government has targeted a fiscal deficit of 4.1% of GDP for this year. The achievability of this target depends on key assumptions about growth, exchange rate, fuel prices and overall investment climate. Any deviation of actual conditions from assumed ones will result in a much higher deficit. Read more

ECB: Easing into negative territory

Posted by: Deepa Vasudevan on Mon, Jun 9th, 2014

The European Central Bank made monetary policy history by switching to a negative rate for a key bank deposit rate. Shorn of the novelty, this is a simple strategy to boost bank credit and to control depreciation of the Euro, both with the aim of restoring economic growth. Read more