Tariffs And Global Woes Weigh On Growth, But Festive Demand Shines: SBI Mutual Fund Flags Resilience As RBI May Step In Amid Liquidity Tightening
The road ahead for India’s economy may be bumpy, but the headlights are still on. A challenging global backdrop and lingering tariff impacts are likely to keep growth projections on the slower side, according to a new report by SBI Mutual Fund.
Yet, amid all the caution, the festive sparkle seems to have lifted spirits. From shiny new cars to buzzing appliance stores, high-value discretionary spending is lighting up the data charts.
As the report put it, “A challenging external environment coupled with the impact of tariffs was expected to keep future growth estimates subdued, however high frequency data for festive season… looks promising.”
In short- while global clouds may linger, India’s shoppers are still bringing the sunshine.
Financing activity in these segments has also remained robust, reflecting resilient consumer sentiment despite global headwinds. The report highlighted that the impact of the recent GST cuts is gradually filtering through the economy. October’s GST collections were in line with expectations, indicating steady consumption momentum.
Even as the recent Cash Reserve Ratio (CRR) cuts continue to transmit through the system, core liquidity has been steadily reducing. This trend, the report suggested, has opened up expectations for potential Open Market Operations (OMOs) by the Reserve Bank of India in the fourth quarter to maintain adequate liquidity conditions.
Looking ahead, the forward outlook on growth and inflation, along with evolving risk factors, suggests some room for further monetary support. The December monetary policy review is expected to remain “live” for what could possibly be the last rate cut in the current cycle.
The report emphasized that despite ongoing debates about the effectiveness of additional rate cuts, the current macroeconomic context provides sufficient space to keep monetary and liquidity conditions supportive of growth. It concluded by stating that there is no current case to speculate on a policy reversal.
(Disclaimer: This News Has Been Syndicated From ANI And Has Been Mildly Edited For Clarity)
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Aishwarya is a journalism graduate with over three years of experience thriving in the buzzing corporate media world. She’s got a knack for decoding business news, tracking the twists and turns of the stock market, covering the masala of the entertainment world, and sometimes her stories come with just the right sprinkle of political commentary. She has worked with several organizations, interned at ZEE and gained professional skills at TV9 and News24, And now is learning and writing at NewsX, she’s no stranger to the newsroom hustle. Her storytelling style is fast-paced, creative, and perfectly tailored to connect with both the platform and its audience. Moto: Approaching every story from the reader’s point of view, backing up her insights with solid facts.
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