Chetan Ahya, global co-head of economics and chief Asia economist at Morgan Stanley, the global financial services entity, says global recovery will be on a sure footing. In an interview with Anup Roy, Ahya says there is good news for Indian and regional exports. Edited excerpts:
What is your expectation from the Reserve Bank of India’s policy review?
We are not expecting RBI to change the policy rate or stance. They might reduce their concerns on the inflation outlook, which probably could be interpreted as a bit more dovish by the market. We are expecting RBI to get back on the rate hike path in the second half of 2018. Until then, they might hold rates steady.
We are expecting inflation to go up to the 4.5-5 per cent range by end-December. That doesn’t really warrant a rate cut now. As you see the normalisation of the inflation trend in the background, you will see pick-up in growth and demand. We expect gross domestic product (GDP) growth to accelerate back to about eight per cent (yearly) soon.