Dun & Bradstreet (D&B) India expects industrial production to register a moderate growth owing to low base. Both the CPI and WPI inflation is likely to remain range bound during Sept-14. Yields in the gilts market is expected to remain range bound during the month of Sept-14, it said. "While fall in global crude oil prices and hopes of lower government borrowing during first half of FY15 is expected to support the market, corporate tax outflows is likely constraint liquidity in the banking system thereby impacting yields.''
''Tentative signs of strength are emerging in the Indian economy with GDP expanding at the fastest pace in Q1 FY15 since Q4 FY12, assisted by a sharp recovery in industrial growth and gradual improvement in services sector. Retail inflation is showing signs of moderation, staying below 8.0% for the third consecutive month in Aug-14, while the current account deficit remains contained driven primarily by contraction in the trade deficit. The government has announced several measures to improve the ease of doing business and there has been some progress in clearing and reviving stalled projects. That said, a full-fledged cyclical recovery is still some distance away and the current macro-scenario should be construed with some caution,'' Arun Singh, senior economist, D&B said.
''On the WPI inflation front, there is a significant base effect at play, resulting in moderation of food prices and it will continue to do so in the forthcoming months as well. The battle against inflation will continue till supply-side issues are adequately addressed. RBI would thus keep its policy rate unchanged till the end of this fiscal year with a probable action visible only in early next financial year,'' he opined.
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