As 2026 nears, can India steady itself in a fragmenting world economy?
Meanwhile, interest-rate trajectories in Europe and the US have reversed, with the aggressive hikes of 2022 and 2023 now being unwound. With the US Federal Reserve appearing more amenable to rate cuts, inflows into emerging markets like India could strengthen in the coming months. A glimpse of this was visible in equity flows in October. As a result, pessimism over the external sector may ease, provided concerns around US government debt expansion and asset quality do not reverse the trend.
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