Slower deficit reduction raises risk of rate hikes4 min read . Updated: 07 Feb 2018, 02:03 AM IST
An earlier-than-anticipated rate hike cycle could potentially slow down the pace of recovery expected in FY19
We had hoped that the FY18-19 Union budget would surprise markets positively by setting a fiscal deficit target of 3% of gross domestic product (GDP). Instead, the authorities chose to adopt a slower consolidation agenda to support the ongoing recovery in growth; targeting fiscal deficit at 3.3% of GDP for FY19, with an upward revised 3.5% of GDP in FY18.
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