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With more and more firms and consumers internalising the inflation target, the economy is likely to approach the Reserve Bank of India's (RBI's) inflation target of 4 per cent this year.
Morgan Stanley and CLSA, two respected brokerages, caution about volatility in the Indian market. Factors such as Lok Sabha polls and cues from the US market contribute to the volatility. However, strong macro fundamentals and corporate earnings growth in India provide stability.
Rand prices softened after South African core inflation missed forecasts. USD/ZAR now hovers around the longstanding 18.7759 support level.
While the ratings agency continues to say India's overall debt level remains way above that of similar-rated peers, strangely it doesn't adequately appreciate New Delhi's lower external debt level compared with others, a senior finance ministry official said. The official said the Centre's fiscal deficit dropped from 9.2% of GDP in FY21 to 6.4% in FY23.
Despite uncertainty around macro fundamentals raising recession risks, all three major equity indexes were up in the first half of 2023.