India’s Recent Macroeconomic Performance: An Assessment and Way Forward

Muneesh Kapur and Rakesh Mohan

No 2014/068, IMF Working Papers from International Monetary Fund

Abstract: The macroeconomic policy response in India after the North Atlantic financial crisis (NAFC) was rapid. The overshooting of the stimulus and its gradual withdrawal sowed seeds for inflationary and BoP pressures and growth slowdown, then exacerbated by domestic policy bottlenecks and volatility in international financial markets during mid-2013. Appropriate domestic oil prices and fiscal consolidation will contribute to the recovery of private sector investment. Fiscal consolidation would also facilitate a reduction in inflation, which would moderate gold imports and favorably impact real exchange rate and current account deficit.

Keywords: WP; exchange rate; current account; central bank; inflation expectation; WPI inflation; Capital Flows; Exports; Fiscal Policy; Gold; Growth; India; Monetary Policy; Oil Demand; Savings; wholesale price index; consumer inflation; balance of payments; short-term debt; headline WPI inflation; private sector investment; Inflation; Imports; Deposit rates; Government debt management; Global (search for similar items in EconPapers)
Pages: 66
Date: 2014-04-29
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Citations: View citations in EconPapers (3)

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