MUMBAI (Reuters) - The Reserve Bank of India (RBI) may ease its pace of rate hikes from this month and shift to similar moves after softer-than-expected growth in April-June, Deutsche Bank said.
Asia's third-largest economy grew 13.5% in the April-to-June quarter, which was lower than RBI's projection of 16.2% and 15.2% forecast by economists in a Reuters poll.
"Given that April-June's GDP growth has disappointed significantly compared to RBI's forecast, we will not be surprised, if RBI decides to slow down its pace of rate hikes to 25 bps clips from September onwards," Kaushik Das, chief economist at Deutsche Bank said.
Das added that the central bank may consider 35 bps rate hike, should the U.S. Federal Reserve deliver a 75 bps rate hike on Sep. 21.
The RBI had raised repo rate by 50 basis points in August to 5.40%, after a 50 bps rate hike in June and 40 bps in May. The next policy decision is due on Sep. 30.
The bank expects sequential momentum of growth to slow down in coming months, as pent-up demand wanes and the cumulative impact of RBI's rate hikes starts filtering into the real economy.
The foreign bank expects the RBI to revise its current growth forecast of 7.2% in 2022/23 towards 7.0% or below.
"We think India's growth slowdown will be felt more in FY24, leading us to forecast a below consensus growth estimate of 6%," adding, it maintains its FY23 growth forecast of 7.1%.
Deutsche Bank projects an overall potential growth estimate of 6.0%-6.5% for India.
(Reporting by Dharamraj Lalit Dhutia; Editing by Neha Arora)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
You’ve hit your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Quarterly Starter
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Access to Exclusive Premium Stories Online
Over 30 behind the paywall stories daily, handpicked by our editors for subscribers


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app