Economics
Bond Vigilantes Seen Giving India's Modi a Pass on Deficit
- India may widen fiscal deficit target to 3.5% of GDP from 3.4%
- Accommodative RBI, global rally to support local bonds: Mirae
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It turns out that bond traders in India can be forgiving of budget misses when economic growth is threatened.
Prime Minister Narendra Modi will widen the budget deficit target to 3.5% of gross domestic product on Friday, up from a February estimate of 3.4%, according to the median forecast of 10 traders and analysts in a Bloomberg News survey. While there may be a knee-jerk reaction in markets, it won’t derail India’s nascent bond rally, they say.