According to Jinshi Data, HSBC has postponed its forecast for a rate cut by the Reserve Bank of India to the fourth quarter. Pranjul Bhandari, chief economist of HSBC India, said that although prerequisites such as fiscal consolidation and slowing growth in unsecured loans are in place, lower food prices still need to be implemented.

HSBC expects the Reserve Bank of India to cut interest rates by 25 basis points in the fourth quarter and the first quarter of next year. Given strong economic growth, the easing cycle will be shallow.

In addition, HSBC expects the government to set a fiscal deficit target of 4.9% of GDP, lower than 5.1% in the medium-term budget, and to reduce net borrowing by 500 billion rupees ($5.98 billion) against the backdrop of a lower fiscal deficit.