Persistently high inflation around the world and a weak Chinese economy are the two main themes which are likely to dominate the global economic scene over the remainder of 2023. Domestically, the Indian economy seems to be performing much better. Real GDP growth in Q1 FY24 improved to 7.8% supported by a favourable base effect, a pickup in private consumption, continued strength in CAPEX spending, services, and construction activities. Yet, risks to the outlook remain due to a fragile rural sector recovery, drag from external trade and higher global oil prices. With inflation already having moderated in August (and expected to moderate further), focus of the monetary policy is likely to be on liquidity management to keep the call money rate close to the policy (repo) rate.