![]() This term was supposed to have been first coined by David Shulman, a former Saloman Brothers investment banker, who said he first used it in a note to clients. But what is a Goldilocks economy?Ī Goldilocks economy is one which enjoys low inflation, sustained economic growth and market friendly policies. This guidance of slowing inflation and accelerating growth given by the economy has initiated discussions that India may be entering the phase of a Goldilocks economy. This means that India is set to continue its reign as the fastest growing economy in the world, outpacing China. RBI reduced its inflation forecasts for the first and second halves of FY19, largely indicating that interest rate cycle is about to begin its downward trajectory after nearly 8 months on hold.Īnother highlight of the monetary policy statement was that RBI continues to expect India’s $2.3tn economy to grow at a rate of 7.4% for the fiscal year 2018-19. Though it was largely expected that the RBI would keep its interest rates steady, the dovish tone of the policy statement surprised on the positive side. ![]() Stock markets joined the rally, with the benchmark S&P BSE index surging 578 points to close at 33,596.8. This led to a rally in the bond markets with the 10 year government bond yield falling to 7.17%, a dip of 17bps, from 7.29% of pervious day. It kept its interest rates steady, while pruning its inflation forecasts for the first and second halves of FY19. The Reserve Bank of India (RBI) held its first monetary policy statement for the fiscal year 2018-19.
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