HALISTER1: India Govt Panel May Revise Fiscal Deficit Goal for FY18: BofAML

India Govt Panel May Revise Fiscal Deficit Goal for FY18: BofAML

(Bloomberg) -- India’s govt panel may change fiscal deficit target for fiscal 2018 to 3%-3.5% of GDP from 3% currently envisaged, Bank of America Merrill Lynch economists including Indranil Sen Gupta write in May 19 note.
  • Expects govt panel to build in “cyclicity” in setting fiscal deficit projections by switching to a target range from a point target; NOTE: N.K. Singh to head India panel to review FRBM act: official
  • Says fiscal expansion will offset growth/credit slowdown
  • Doesn’t expect higher FY18 fiscal deficit target to affect yields; says step-up in RBI’s OMOs to push money markets toward neutral liquidity by FY18 should result in excess demand in govt securities
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Indranil Sengupta (DSP Merrill Lynch Ltd)

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