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Home / News / India /  The week ahead, in charts: EU trade deal and FIFA play-offs

Every Monday, Mint’s Plain Facts section features key data releases and events to look out for during the week. The headline inflation numbers for May are due to be released this week in India. The central banks of the US and the UK are scheduled to hold meetings to review their monetary policies. Representatives of India and the EU are also set to meet in Brussels to resume talks over firming up a free trade agreement. The last two spots for the FIFA World Cup, which is to be held later this year, will be decided this week. The following are the key things to watch out for:

India inflation

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India’s headline inflation data for May will be released on Monday evening. Analysts predict that May’s inflation figure will be lower than April’s eight-year high of 7.8%, owing to a high base. Last year, inflation had jumped from 4.2% in April to 6.3% in May.

Nonetheless, it will remain significantly above the upper band of the RBI’s inflation tolerance level of 6% for a fifth straight month due to high food and fuel prices. A Mint poll of 24 economists has put the estimate at 7.1%.

With soaring inflation, the month of May had seen measures both on the monetary and fiscal sides. The central bank reversed its long-standing policy accommodation, while the Centre cut excise duties on fuel among other steps. However, the full impact of these measures is unlikely before June.

Earlier this week, the RBI projected that inflation would average over 6% this quarter and the next.

India-EU FTA

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India and the European Union will formally resume talks in Brussels on Friday for firming up a free trade agreement, which has been on the backburner since 2013. Commerce and industry minister Piyush Goyal said the purpose of the FTA would be to provide market access and opportunities for exporters in India. Both India and the EU said they hope to conclude the agreement before 2024. Under the FTA, India wants the EU to conclude agreements on investment protection and geographical indications. Tariffs and data protection have been among the key areas of disagreement in the talks as India seeks to be recognised as a ‘data-secure’ country. India’s exports with the 27-member nation bloc touched a record high of $65 billion in 2021-22, up 57% from 2020-21. India recently signed FTAs with Australia and the UAE, while an FTA with the UK is proposed to be concluded by Diwali this year.

Fed meet

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The US Federal Reserve, in its last meeting in May, unanimously raised the benchmark interest rate by 50 basis points (bps). This was the largest move since 2000, setting the course for accelerated tightening of monetary policy. In March, the rate had already been hiked by 25 bps, the first increase in more than three years. Another 50-bps hike is on the cards when the Fed makes its next policy announcement on Wednesday.

The Fed in its last statement said it was “highly attentive to inflationary risks". The year-on-year headline inflation stayed elevated at 8.3% in May. It’s a long way, for the Fed, from here to bring down the inflation to its long-term target of 2%. Even though the members noted robust household spending, business investment and job gains, they acknowledged that the overall economic activity edged down in the March quarter. With headwinds from the Ukraine-Russia war still present, the worries for the Fed are far from over.

BoE meet

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Later this week, the Bank of England (BoE) may look to increase the interest rate for the fifth time since it started raising rates in December last year. The UK is currently facing record-high inflation, which was at a 40-year high of 9% in April. Economists expect the UK’s inflation to be the highest among G7 countries until 2024. The country is seeing not just a rise in fuel prices, like the rest of Europe, but also a general price rise in goods and services like North America.

The BoE is walking a tightrope between taming inflation and avoiding recession. The BoE expects the output to shrink by 1% in the last quarter of 2022 when the inflation may also cross the double-digit figure. 2023 may see no expansion in GDP, making Britain to be the worst hit major economy by the Ukraine-Russia war, as per the forecasts of Organisation for Economic Co-Operation and Development.

FIFA play-offs

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The last two qualification matches for football’s flagship event, the 2022 FIFA World Cup, are set to take place this week at Qatar’s Ahmad Bin Ali Stadium. The matches will take place in the ongoing intercontinental World Cup playoffs, where teams from different continent-based federations compete for World Cup spots. So far, 30 countries have qualified for the 32-nation event that is set to take place later this year, from 21 November to 18 December, in Qatar.

The last two spots will be filled this week: on Monday, Australia will play Peru for a spot in Group D, and on Tuesday, Costa Rica will fight it out with New Zealand for a spot in Group E of the main tournament.

Football fans in India can tune in to both matches at 11.30 pm.

According to FIFA, the stadium features innovative cooling technology for “an enjoyable experience for teams and fans" in Qatar’s heat at this time of the year.

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