Events over the past few weeks have heightened global economic uncertainties. Conflict in the Middle East has boosted the price of oil and the risk of further consequences remains. As inflation rates around the world remain well above their desired levels, we expect interest rates to remain at or above prevailing levels for considerably longer than expected. India’s economic activity in Q2 remained healthy thanks to sustained demand for both goods and services, the government’s push to capital expenditure, recovery in real estate and a boost in manufacturing sector likely due to the festive season. However, the impact of an uneven monsoon on agriculture and consequently on the rural demand and slowing external sector demand likely weighed on growth. From the policy perspective, we believe the central bank is likely to hold the policy rate at the current level in FY24 to align inflation to the target of 4%.