India Economics Weekly:Macro outlook for 2HFY18and beyond

The newly constituted Prime Minister’s Economic Advisory Council (PMEAC) heldits first meeting this week, in which it set up a 10-point economic agenda, to lookinto key macro areas including growth, employment, fiscal framework, monetarypolicy, public expenditure, agriculture, the social sector, etc. A sharp slowdownin growth in the first six months of the current year led to the formation of thiscouncil, whose task will be to look into various aspects of the economy andrecommend short-term implementable ideas that can help revive growth, boostemployment, deepen inclusivity, improve productivity and strengthen macrostability.

    We will hear more from the council when they hold their next meeting, but theimpression from the first press conference was that the members were not infavour of fiscal stimulus or aborting the medium-term fiscal consolidation agenda.

    It will be particularly interesting to see what the members recommend as far asmonetary policy is concerned, given that RBI has been cautious in cutting ratesduring this cycle. In the meantime, we take stock of our own forecasts relatedto growth, inflation, monetary, fiscal and external policies/profiles for the secondhalf of FY18 and beyond and also compare them with the latest results of theprofessional forecasters’ survey, which was released by RBI on 4th October.