Amid the ongoing talks about the government possibly missing the budgeted fiscal deficit target, Chirs Wood said a timely announcement by the government on deficit may help.
Amid the ongoing talks about the government possibly missing the budgeted fiscal deficit target, Chirs Wood said a timely announcement by the government on deficit may help, ET Now reported. If the government announces that the fiscal deficit target may get breached since the slowdown is much bigger than anticipated, both stock and bond markets are expected to take relief out of it, Christopher Wood, global head of equity strategy at Jefferies, told ET Now. The stock markets are not expected to see a big sell-off as a result, since it has already been assumed, he added.
The fiscal deficit has hit 102 per cent of the budget estimate till October, surpassing the full-year target set by the Modi government. The deficit touched 102.4 per cent of the FY20 budget estimate at Rs 7.2 lakh crore in the first ten months so far, the government data showed. On concerns over the government overshooting the 3.3 per cent target for FY20 owing to the corporate tax cut and the lower-than-expected tax buoyancy, Nirmala Sitharaman recently said: “Let the RE (revised estimate) stage come and we shall take a call on the fiscal deficit.” The government has so far been maintaining that the deficit target will be adhered to, Nirmala Sitharaman added.
Meanwhile, after the RBI slashed India’s GDP growth outlook for 2019-20 downwards to 5%, from 6.1% earlier, veteran equity strategist Chris Wood observed that India has seen the most surprising collapse in growth. ” India has seen the most surprising collapse in growth, the repercussions of the NBFC issue has impacted growth,” Chris Wood added.