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Fiscal deficit can touch 3.6-3.7% of GDP breaching budgeted figure

By IndianMandarins- 07 Dec 2019


The decision of the RBI to pause and wait for Budget numbers seems to have convinced the market that the central bank suspects the fiscal deficit numbers would be breached by some margin and there would be extra borrowing.

Given the current conditions, fiscal deficit can go to 3.6-3.7 per cent of GDP and not 3.3 per cent as budgeted. The extra borrowing could be in the range of Rs 50,000-80,000 crore to bridge this deficit. Even as the short-term money market rates have fully reflected. RBI waiting for Budget numbers has surprised the bond market.

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