SK Ghosh, Group Chief Economic Advisor, SBI, says “if you look into the data of the US consumer spending and other data, labour markets are saying house prices are now declining in the US. Taking all these factors into account, I believe that possibly the slowdown in the global economy, specifically the US, at a rate which is larger than anticipated by the market would be the possible source of outside risk for the Indian economy.”
What is your view on what is happening to the yield rates globally? 10-year yields are coming down from 5% plus to 4.2-4.3% thereabouts. What is the normalised level world should make do with? Do you think 4.2%, 4.3% is the new normal or is it headed lower?
As we have said in our report recently, the outlook on the global economy so far is that the US could be spared a major recession and the growth has been very strong. But beyond these headline growth numbers, the US’ real economy numbers do not look so inspiring at this point of time. The payroll numbers have been revised downwards by eight times in nine months. There have also been some recession indicators showing that the US could be possibly on the verge of a significant slowdown. The only thing which is keeping the US economy headline growth strong is currently the excess savings of $1 trillion the US consumers have built up over the years.
So taking all this and other factors into account and given the fact that the Brent crude prices are also taking a dip, these declines in the real
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