Bhutan's political landscape will likely be dominated by the run up to the 2018 legislative elections and we believe that the elections are likely to be more closely contested than the previous polls. However, pre-election rhetoric is likely to be limited out of respect for the king and various parties are likely to focus on key issues such as development and sovereignty. We have downgraded our...
The Reserve Bank of India left its benchmark repo rate unchanged at 6.00% during its December 6 meeting, and we continue to expect interest rates to remain steady for the remainder of FY2017/18. The central bank is constrained by opposing goals of curbing rising inflationary pressures, but also ensuring that the recent economy recovery since Q2FY2017/18 remains intact.
The GST Council's decision to reduce taxes on more commonly used goods and services demonstrates the government's commitment to optimising the tax system in order to support growth, and we continue to expect economic activity to pick up in H2FY2017/18 (April-March).
We maintain our average FY2017/18 (April-March) consumer price inflation (CPI) forecast at 3.5%, and we expect the Reserve Bank of India (RBI) to hold its benchmark repo rate at 6.00% for the rest of FY2017/18 due to rising inflation and expectations of an economic recovery in the second half of the fiscal year.
Ongoing tensions between India and China over the territorial dispute in the Doklam region between China and Bhutan highlights the foreign policy challenges that Bhutan faces and we expect these challenges to persist as both China and India seek to expand their respective spheres of influence. With concerns rising within Bhutan over the scope of India's influence, Thimpu will likely seek to...
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