As we approach 2024, the cycle of rate hikes by global central banks is almost over. But when will global interest rates start to fall? What impact will this have on growth? In the latest episode of the State of the Economy podcast, Industry’s Lokeshwarri SK speaks to Achala Jethmalani, Economist at RBL Bank, on various aspects of the global and domestic economy. The conversation covers topics such as the global growth outlook, interest rates, bond yields and the trajectory of major currencies like the US dollar and Indian rupee. She also shares crucial information on the upcoming interim budget, including the Centre’s likely borrowings from the market.
Jethmalani highlights that 2023 marked the peak of policy rates in advanced economies and that at the beginning of 2024, central banks are expected to begin a phase of lowering rates. The discussion revolves around the pace and timing of these cuts, with a focus on the US Federal Reserve, which is expected to announce its first rate cut in June.
The discussion details potential risks to projected growth, including geopolitical tensions, supply chain disruptions and the impact of elections globally, particularly in the United States and India. Jethmalani also addresses the potential for inflation spikes, citing factors such as geopolitical issues and Red Sea logistical disruptions.
The podcast also discusses the evolution of the US dollar, with an overview of its current strength and the factors that influence it. The inclusion of Indian bonds in global indices by JP Morgan and Bloomberg is seen as a potential driver of large capital flows into the Indian debt market.
Jethmalani also gives us an idea of what to expect from the Union Budget this year, especially when it comes to government borrowing figures. She expressed optimism about the debt market in 2024, expecting it to be favorable, with moderate supply and potential positive surprises.
The podcast provides a comprehensive analysis of the global economic landscape for January 2024, addressing key factors shaping growth, inflation, currency movements and the outlook for financial markets.
(Host: Lokeswarri SK, Producer: Anjana PV)
About the State of the Economy Podcast
The Indian economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others appear to be on fire at full throttle. To help you understand all of the country’s contradictions, businessline offers podcasts with experts ranging from finance and marketing to technology and start-ups.
