The Indian economy is currently navigating a "geopolitical stress test." While domestic demand remains resilient, the convergence of the Iran-Israel conflict , a widening trade deficit , and a uptick in inflation creates a complex outlook for the next 3 to 6 months. Based on the latest data prints (Feb/March 2026), here is the forecast: 1. Macro-Data Analysis CPI Inflation (February Print: 3.21%) The February print rose to 3.21% (from 2.74% in January). While still within the RBI's 4% target, the "hook" at the end of the trend is concerning. The Driver: Primarily food inflation (3.47%) and the initial pass-through of rising oil and gas prices. 3–6 Month Outlook: Inflation is expected to trend toward 4.0% – 4.5% as the full impact of the Iran-related oil spike hits the supply chain. PMI Performance (March Readings) The March indicators show a "two-speed" economy: Manufacturing PMI (56.9): Hit a 4-month high. Domestic orders are robust, but ex...
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