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Third Quarter Review of Monetary Policy 2012-13

Dr. D. Subbarao, Governor of Reserve Bank of India presented the Third Quarter Review of the Monetary Policy 2012-13. Some highlights of the same are given here. The full report is also available for download.

Since the Second Quarter Review (SQR) of Monetary Policy in October 2012, headwinds holding back the global economy have begun to abate gradually, although sluggish conditions prevail. In the US, activity gathered momentum in Q3 of 2012 but this is unlikely to have been sustained in Q4. While a political consensus to avert the ˜fiscal cliff™ has calmed financial markets, how the debt ceiling is managed will be crucial in shaping market sentiment on the way forward. The euro area economy is threatened by continuing contraction, notwithstanding the liquidity firewall of the European Central Bank (ECB) and the commitment to act collectively to backstop the union. Overall, however, risks of the sovereign debt crisis disrupting the global financial system have ebbed. Japan has re-entered recession. Among the emerging and developing economies (EDEs), a pick-up in the pace of growth in China is likely. A combination of a slump in external demand and domestic structural bottlenecks has slowed down growth in most other EDEs. Furthermore, inflationary pressures persist in some of them. Overall, global economic prospects have improved modestly since the SQR even as significant risks remain.

Download the full Review Report from the link given below. 

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