PremiumThe RBI’s monetary policy committee will meet this week to review its policy in view of worrisome inflation levels. Elections to fill 57 Rajya Sabha seats are due on Friday. A global Apple conference will keep the tech community hooked. The monsoon is likely to reach Mumbai this week
Every Monday, Mint’s Plain Facts section features key data releases and events to look for in the coming week. The Reserve Bank of India’s (RBI’s) monetary policy committee (MPC) will meet this week to review its policy in view of worrisome inflation levels. Elections to fill 57 Rajya Sabha seats are due on Friday. A global Apple conference will keep the tech community hooked. The monsoon is likely to reach Mumbai this week.
1. RBI policy
The out-of-turn monetary policy meeting in early May, which saw a repo rate hike of 40 basis points (bps), could only be the beginning. It reflected the urgency to control inflation that had jumped close to 7% in March and surged to an eight-year high of 7.8% as of April. No wonder, the street is expecting more hawkishness in the next scheduled meeting this week.
The double whammy of commodity price shocks and supply-chain issues has shifted RBI’s priority to inflation containment, said an Emkay Global report dated 18 May. Analysts expect another 25-50 bps hike when the policy decision is announced on Wednesday, with further hikes later this year.
The front-loaded rate-hiking cycle, however, does not imply a lengthy tightening cycle, the report said. Once it reaches the supposedly neutral pre-covid monetary conditions, the bar for further tightening incrementally may be higher amid increasing growth-inflation trade-offs.
2. Rajya Sabha polls
With the 10 June Rajya Sabha elections looming, members of legislative assemblies (MLAs) in poll-bound states are being moved to hotels and “chintan shivirs". As the term of 57 existing members, representing 15 states, is coming to an end over the next two months, these seats need to be filled. 41 candidates representing 11 states have already been elected unopposed. The elections will take place on the remaining seats.
The factionalism and poaching of independent MLAs in Haryana and Rajasthan may create roadblocks for the Congress’ nominated candidates. Sniffing trouble in the opposition camp, Bharatiya Janata Party (BJP) has fielded an additional candidate in Haryana and is backing media baron Subhash Chandra in Rajasthan. In Karnataka, both Congress and BJP have fielded an extra candidate to ruin the plans for Janata Dal (Secular). In Maharashtra, Shiv Sena and Nationalist Congress Party are reportedly dissatisfied with the Congress’ candidate choice, but are confident of pulling through the polls.
3. ECB rates
Inflation in the 19 countries of the eurozone was four times the European Central Bank’s (ECB’s) 2% midpoint target in May. Retail prices have consistently risen faster than ECB expected, initially because of supply chain disruptions during the pandemic and now the war in Ukraine. The upward pressure on prices is broadening beyond energy and moving to a wide range of industrial goods. This may accelerate monetary policy normalization and ECB could wind down bond purchases when it meets on Thursday. Economists, though, expect rate hikes only from July.
Europe was gradually reviving from the economic impact of covid, but renewed disruptions and rising uncertainty over the war are exacerbating headwinds to growth. Also, the EU’s decision to partially embargo oil imports from Russia will increase concerns.
4. Apple Developers Conference
Apple’s Worldwide Developers Conference (WWDC) will start on Monday and will go on until Friday. While being a showcase for the latest updates in iOS, iPadOS, macOS, watchOS, and tvOS, the event also provides developers across the world access to Apple engineers and technologies. This time, the major excitement is around iOS16, likely to be the next big update from the iPhone makers. Apple boasts of a global community of more than 30 million developers.
Every year, a handful of developers win the Apple Design Awards, which are given in six categories, including inclusivity, delight and fun, interaction, social impact, visual and graphics, and innovation. Past winners have built products of varying functionalities, from an animation app to a text-to-speech reader. The line-up is promising this year too. Apple also organizes a coding challenge for students as part of this event.
5. Monsoon progress
The southwest monsoon is expected to see good progress in the coming week, with states such as Maharashtra, Andhra Pradesh, and Telangana likely to see showers. It is unlikely to reach Mumbai before Friday though, said the India Meteorological Department (IMD). Kerala saw an early onset on 29 May and the monsoon arrived in Karnataka on 31 May.
The rains are likely to cover most states of the country by the end of this month, with Delhi and other neighbouring regions likely to receive showers by 25-30 June, shows a monsoon map put out by the weather forecaster.
In some more respite, the IMD last week raised its forecast for this year’s monsoon to 103% of the long period average (LPA) from 99% predicted in April. Most parts of the country are expected to receive normal to above normal rainfall. If the forecast does come true, it could help tame runaway inflation levels.
