Strategy Note /
India

IN : Strategy - Bonds don’t lie

    Jay Shankar
    CGS-CIMB
    16 April 2021
    Published by

    Economic recovery in FY22 will face expected risks from COVID resurgence, inflation, monsoon and likely unsettling of financial markets later in the year. Bond yields are signaling inflationary pressures and/or higher government market borrowings. Inflation largely cost-push rather than demand pull now. Production capacity losses last year will need to be factored into estimates of aggregate demand, inflation and output.