Reserve Bank of India Expected to Maintain Interest Rates

India's Reserve Bank is facing pressure to cut its benchmark repo rate, currently at 6.5%, due to a surprising slowdown in economic growth that saw GDP drop to a mere 5.4% last quarter. While 21 out of 25 economists predict the rate will remain unchanged, Nomura suggests a potential 25 basis point cut to stimulate growth despite inflation concerns. In Australia, economists forecast the Reserve Bank will hold interest rates steady at 4.35% during its upcoming meeting, with expectations for cuts possibly starting as early as May 2025 as inflation trends downward. This situation reflects broader economic challenges, with both countries experiencing sluggish growth and inflation management dilemmas. Australia's GDP growth has also stagnated, prompting government spending increases while maintaining low productivity levels, which diminishes the likelihood of a rate cut there. Both central banks are navigating a complex landscape where growth support and inflation control must be balanced.