India: This Is As Good As It Gets For the Economy

Macroeconomics

177 Views, 10 May 2022 15:26

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EXECUTIVE SUMMARY

Corporate India booked a robust earnings season for 1Q22, which is a product of the sanguine macro backdrop and the release of pent-up demand with the easing of most restrictions.
However, this may be as good as it gets for the economy amid several headwinds to growth. The recent heat waves threatens industrial activity and wheat crop yields.
Capacity utilisation rates remain low, holding back the capex drive and investment growth, despite the buoyant earnings season. Watch for growing pressure on the RBI to keep yields in check.

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