INSUBCONTINENT EXCLUSIVE:
The outcome of a general election due by May is a potential pitfall for a nation already battered by emerging market turmoil and a currency
consequences for economy.
Here are key themes to watch for in 2019:
Global SlowdownNomura Holdings Inc
estimates global growth will ease to around 2.8 percent in 2019 from 3.2 percent in 2018, led by a slowdown in China, and a moderation in
United States and euro-area toward long-term trends
said.
Monetary PolicyAfter raising interest rates twice last year, 2019 may see Reserve Bank of India reverse course by giving up its
hawkish monetary policy bias in favor of a neutral stance
The six-member monetary policy committee may even be in a position to lower interest rates in first half of year, according to some
analysts.
Shaktikanta Das, new central bank governor, is seen as more dovish on monetary policy, saying inflation is benign and supporting
His predecessor, Urjit Patel, who unexpectedly quit last month, took a more cautious approach on price growth.
Interest-rate cuts could give
Data for three months through September showed growth eased to 7.1 percent from 8-plus percent pace seen in previous quarter.
Spending
waivers announced by opposition Indian National Congress party in three states it won from BJP.
The government is said to be studying three
options, including a cash handout for farmers, to ease distress for farmers and to shore up popular support ahead of elections
addition to programs for guaranteed crop prices and healthcare, full impact of which will be known only in budget, due to be delivered on
1.
With government already exceeding its budget deficit targets in October, any additional measures will need to be balanced with possible
reductions in spending to meet fiscal goal of 3.3 percent of gross domestic product for year through March.
A loss for Modi in general
election is a risk in terms of policy continuity, and investors are watching events closely.
Sonal Varma, chief India economist at Nomura
in Singapore, expects government to be in limbo until a new administration is in place in May, posing a drag on spending growth in first
