The Reserve Bank is likely to pause at the upcoming policy review in August and cut rates by 25 basis points each in the October and December reviews, Japanese brokerage Nomura stated

Economic activity continues to remain weak and will lead to a 6.1% contraction in India’s GDP in the current fiscal, a foreign brokerage stated.

The Reserve Bank is likely to pause at the upcoming policy review in August and cut rates by 25 basis points each in the October and December reviews, Japanese brokerage Nomura stated in a report.

All the analysts expect a contraction in the GDP due to the COVID-19 pandemic, which has impacted both supply and demand forces in the economy since March. Official data also suggests a surge in inflation, which will further drag down the GDP in real terms.

Nomura stated the June quarter will be the ‘nadir’ from a growth perspective and the economy will contract by 15.2% and the GDP will never come into the positive territory in the remaining part of this fiscal.