India: Budgeting ahead of elections – Standard Chartered

Analysts at Standard Chartered are expecting that the Indian government is likely to meet its FY19 fiscal deficit target of 3.3% of GDP and target of 3.2% in FY20.

Key Quotes

“Even in our worst-case scenario of a 3.5% deficit in FY19, we do not see a reversal of fiscal consolidation.”

“Risks to our projections include potential farm stimulus, transfer of excess capital from RBI to government, oil prices.”

“While farm stimulus cannot be ruled out, it is unlikely to widen the deficit significantly given fiscal constraints and implementation issues.”