India may hike rates next year, says Goldman

Bloomberg

India’s central bank could start tightening monetary policy from next fiscal year as consumer prices rise, according to Goldman Sachs Group Inc.
“Inflation is going to determine what the RBI does over the course of next year,” Santanu Sengupta, senior India economist at Goldman said in an interview with Juliette Saly and Rishaad Salamat on Bloomberg TV. “Input cost increases for the manufacturers will get passed on to consumers over a period of time as the economy reopens and pricing power comes back.”
Companies is India have been seeing a pressure on their margins as supply side constraints and global commodity prices increase input costs. That’s seen pushing up overall inflation as some
of those firms have started
raising prices for customers.
“We are first expecting the RBI to continue with liquidity tightening that’s going on right now, then hike reverse repo by 40 basis points,” Sengupta said, forecasting 75 basis points of repo rate hikes in 2022. He sees inflation at around 5.8% next year, higher than an estimated 5.2% in the current year.
India’s central bank is broadly expected to keep its policy rates unchanged at its meeting next week.