Market Outlook: Slowdown in India's Growth May Prompt Early Rate Cuts by RBI

Foreks - OCBC economists believe that the considerably lower-than-expected GDP growth in the third quarter could prompt the Reserve Bank of India (RBI) to reduce interest rates earlier. OCBC Senior Economist Lavanya Venkateswaran stated that the data indicates a weakening growth momentum in key areas such as private consumption and investment spending. The Indian economy grew by 5.4% in the third quarter, well below the market expectation of 6.5%. OCBC predicts a 25 basis point cut at the RBI meeting on Friday, followed by another cut in February. The economist remarked, "The justification for cuts is largely supported by core inflation, which is following a trend that provides stability." OCBC also expects the disinflationary momentum to continue in the coming months. The RBI's interest rate meeting will take place on December 6.