1、Steady growth:I n 2024,we expect macro-economi c resi li ence to conti nue i n I ndi a ami dst steady growth at 6.3%yoy.The year wi ll li kely be a tale of two halves:Pre-electi ons,government spendi ng wi ll li kely be the growth dri ver.Post-electi ons,we expect i nvestment growth to re-accelerate

2、,especi ally from the pri vate si de.A floor on core i nflati on:Repeated supply shocks are li kely to keep headli ne i nflati on above target at 5.1%yoy(average)i n 2024.We expect government i nterventi on to keep a li d on food i nflati on,where possi ble,i n an electi on year.We expect core i nfl

3、ati on to only decli ne to 4.5%yoy(average)i n 2024 from an esti mated 5.1%i n 2023 gi ven food and oi l supply shocks and a steady growth outlook.A“hawki sh hold”i n a“hi gher for longer”world:Somewhat elevated i nflati on relati ve to target wi ll li mi t the room for monetary easi ng we forecast

4、the RBI to stay on hold unti l Q4 2024 and then cut only 50bp cumulati vely by early 2025.The“hi gher-for-longer”global scenario and elevated i nflati on domesti cally wi ll mean conti nued hawki sh gui dance and ti ght banki ng system li qui di ty from the RBI.Low external vulnerabi li ty:Hi gher o

5、i l pri ces,slower growth i n tradi ng partners,and steady domesti c growth i s li kely to i ncrease the current account defici t by 60bp to 1.9%of GDP i n 2024.Whi le servi ces exports have peaked(as a share of GDP)i n our vi ew,they wi ll conti nue to cushi on a wi de goods trade defici t i n 2024

6、.Forei gn portfoli o i nflows from I ndi as i nclusi on i n a global bond i ndex should help fund the current account defici t.INR:A port of calm:Nearly$600bn of FX reserves should conti nue to allow the RBI to i ntervene promptly and keep the USD/I NR stable.We expect the USD/I NR to hover around 8