MUMBAI (Reuters) -Financial exercise in India stays sturdy, with the agriculture and companies sectors doing effectively, India’s central financial institution governor mentioned on Wednesday, commenting on fears of slowing development.
Inflation, nonetheless, stays a problem and the following transfer on rates of interest have to be weighed fastidiously, Shaktikanta Das, governor of the Reserve Financial institution of India (NS:), mentioned at an occasion.
“(Economic) data which is coming in is mixed. But the positives outweigh the negatives and, by and large, underlying activities remain strong,” Das mentioned.
Company earnings for the July-September quarter have proven weak point in city consumption, with fast paced client items (FMCG) companies reporting flat or declining quantity development.
Excessive-frequency indicators, such because the buying managers index for manufacturing and companies, slowed in September however rebounded in October.
Das mentioned he wouldn’t “rush to say the economy is slowing”.
Final month, the RBI retained its development forecast for the present monetary yr at 7.2% and whereas it maintained rates of interest, it eased its financial coverage stance to ‘impartial’ from ‘withdrawal of lodging’, opening the door to charge cuts.
Excessive meals prices has led to inflation accelerating lately — from 3.65% in August to five.49% in September — and Das mentioned the October inflation print, due subsequent week, goes to be “very high”.
“A change in stance doesn’t mean there will be a rate cut in the very next meeting,” Das mentioned.
A Reuters ballot confirmed {that a} small majority of economists anticipate the RBI to chop charges in December.
