As we step into 2024, the rate-hike cycle by global central banks is almost done. But when will global interest rates begin to trend lower? How will it impact growth? In the latest episode of State of the Economy podcast, businessline’s Lokeshwarri SK, speaks to Achala Jethmalani, Economist, RBL Bank, on various aspects of global and domestic economy. The conversation covers topics including the global growth outlook, interest rates, bond yields, and the trajectory of major currencies like the US dollar and the Indian rupee. She also shares crucial insights on the upcoming interim budget including the likely market borrowing of the Centre.

Jethmalani emphasises that 2023 marked the peak of policy rates in advanced economies, and as 2024 begins, central banks are expected to initiate a phase of rate cuts. The discussion revolves around the pace and timing of these cuts, with a focus on the US Federal Reserve, which is anticipated to deliver its first rate cut in June. 

The discussion details the potential risks to the projected growth, including geopolitical tensions, supply chain disruptions, and the impact of elections globally, especially in the US and India. Jethmalani also addresses the potential for inflation spikes, citing factors such as geopolitical issues and disruptions in the Red Sea logistical aspect. 

The podcast also discusses the movement of the US dollar, with insights into its current strength and the factors influencing it. The inclusion of Indian bonds in global indices by JP Morgan and Bloomberg is discussed as a potential driver for significant capital flows into the Indian debt market. 

Jethmalani also gives us an idea of what to expect from the Union budget this year, especially about government borrowing figures. She expresses optimism about the debt market in 2024, expecting it to be favourable with subdued supply and potential positive surprises. 

The podcast provides a comprehensive analysis of the global economic landscape for January 2024, touching on key factors shaping growth, inflation, currency movements, and the outlook for financial markets. 

(Host: Lokeswarri SK, Producer: Anjana PV)

About the State of the Economy Podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups