Loan growth is likely to stay sluggish this yr due to weak demand & cautious approach on unsecured lending. Going forward, gap between credit growth & deposit growth is likely to shrink.
March has been a good month for equity & currency, backed by FPI inflows & weak dollar. Going forward, tariffs, Chinese markets, oil prices & corporate earnings may have a role to play.
While IMF welcomes India's shift towards debt-based fiscal anchor, it recommends improvements to the framework, besides endorsing exchange rate flexibility & other steps.
In fact, the latest reading of the Federal Reserve Bank of Atlanta’s nowcast of real GDP growth suggests a contraction of 2.4 percent in the first quarter of 2025.
The rebound in growth in December quarter was expected, owing to improvement in govt spending, festival-induced boost to consumption & a sharp increase in non-oil exports.
US is seeing a shift in govt’s approach to digital assets, while India’s draft Income Tax Bill introduces strict reporting requirements for crypto transactions, indicating a watchful outlook.
Use of tariffs stems from the urgency to curb rising US trade imbalance. US trade deficit in goods widened to $1.2 trillion in calendar year 2024 from $1.06 trillion in 2023.
Delhi has historically been in revenue surplus, but last 2 years have seen a deceleration. Subsidies & cash transfers may escalate the deficit, unless accompanied by a hike in revenues.
Govt has done well to stick to path of fiscal consolidation. It’s unclear if compression of revenue spends net of interest payments is the direction the govt would like to take in coming yrs.
Liquidity has been a concern as banks have been grappling for stable deposits for months. This is reflected in an increase in the credit-deposit ratio for individual banks.
India’s industrial output growth saw a 10-month low in June, with Index of Industrial Production (IIP) growing by mere 1.5% as against 1.9% in May 2025.
Gen Dwivedi framed Op Sindoor not just as retaliation to Pahalgam, but as demonstration of India’s capability to fight multi-domain conflicts with integration between services & agencies.
Standing up to America is usually not a personal risk for a leader in India. Any suggestions of foreign pressure unites India behind who they see as leading them in that fight.
COMMENTS