Stable government brightens prospects for economic recovery: RBI
27/06/2014 15:19
The Reserve Bank of India today said improved political stability and expectations of a decisive and coordinated policy response augur well for the economy and the markets, reported PTI. "Formation of a stable government at the Centre has ameliorated political risk and has led to expectations of better policy coordination and implementation which has had a positive impact on the markets," the RBI said in the ninth half-yearly Financial Stability Report released. A strong push to implementing policy is expected to provide the necessary impetus to the investment cycle, the report said. While capital expenditure, mainly to develop infrastructure, is vital for growth, fiscal consolidation also remains a policy imperative, it said. The report said that although the general risks that the economy is facing are expected to fall, there could be some deterioration on the current account and fiscal deficit fronts. It said the growth-inflation dynamics have been adverse for seven of the past eight quarters with sub-5 per cent GDP growth and high CPI inflation. The report said efforts to stabilise the economy through monetary policy interventions need to be complemented by appropriate fiscal policy measures. "Easing of domestic supply bottlenecks and progress on the implementation of stalled projects that have already been cleared should further improve the growth outlook," the report said.
27/06/2014 15:19
The Reserve Bank of India today said improved political stability and expectations of a decisive and coordinated policy response augur well for the economy and the markets, reported PTI. "Formation of a stable government at the Centre has ameliorated political risk and has led to expectations of better policy coordination and implementation which has had a positive impact on the markets," the RBI said in the ninth half-yearly Financial Stability Report released. A strong push to implementing policy is expected to provide the necessary impetus to the investment cycle, the report said. While capital expenditure, mainly to develop infrastructure, is vital for growth, fiscal consolidation also remains a policy imperative, it said. The report said that although the general risks that the economy is facing are expected to fall, there could be some deterioration on the current account and fiscal deficit fronts. It said the growth-inflation dynamics have been adverse for seven of the past eight quarters with sub-5 per cent GDP growth and high CPI inflation. The report said efforts to stabilise the economy through monetary policy interventions need to be complemented by appropriate fiscal policy measures. "Easing of domestic supply bottlenecks and progress on the implementation of stalled projects that have already been cleared should further improve the growth outlook," the report said.
