“We are in a situation of relatively comfortable growth and inflation numbers. Interest rate increase is ruled out, choice is between status quo and cut,” Standard & Poor’s Chief Economist (Asia-Pacific) Subir Gokaran told reporters here after the pre-budget meeting between Finance Minister P Chidambaram and economists. Mr Gokran said he would wait for industrial production numbers slated to be released on Friday before giving any definitive opinion on the issue.
A status quo on interest rates is very likely, he added. “We are not seeing enough signs of slowdown in industry which was earlier indications to warrant a cut at this point.
Rate cut
May be that situation changes when RBI announces policy in April. At this point of time, rate cut possibility is not very high,” he added. On his part, Icrier Director & Chief Executive Rajiv Kumar said if interest rates are cut, inflation and liquidity will not be stoked.
Even after rising by 0.5 per cent, inflation was just 3.5 per cent for the week ended December 22.
