According to the latest Reuters poll of economists, India’s government is expected to announce higher fiscal spending and revise its borrowing target slightly higher for this year in the federal budget on Friday.
Key Findings:
“The median forecast in the series from the June 28-July 2 poll of over 45 economists showed the government will revise its fiscal deficit target up to 3.5% of gross domestic product (GDP) for the current fiscal year and 3.3% for 2020-21.
That is up from 3.4% and 3.0%, respectively, projected in the interim budget.
However, the most common reply provided by forecasters for fiscal 2019-20 was 3.4%, followed by the highest forecast of 3.6%, suggesting scope for some surprise when newly-appointed Finance Minister Nirmala Sitharaman tables her budget on Friday.
Around 60% of economists, 21 of 37, who answered an additional question about the focus of the budget said it would be more on fiscal expansion than prudence.
But when asked if the government will also try to limit borrowing to the 7.1 trillion rupees ($103.1 billion) pegged in the February interim budget, a two-thirds majority, 25 of 38, said yes.”
Heading into this Friday’s budget, the Indian Rupee hit over 2.5 month highs against the greenback earlier today at 68.78, with USD/INR now trading modestly flat near 68.84 region.
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