Behind RBI’s repo rate pause: Slump in consumption, tepid private investment

The pause in the rate hike cycle by the Reserve Bank of India (RBI) is now being seen as a favourable step to make the growth-inflation trade-off lean more in favour of the growth, especially in the backdrop of emerging concerns over slowing consumption and tepid private investment in Delhi’s policy circles, with high interest rates being cited as a crucial factor affecting demand. This also assumes significance given that many global agencies have lowered India’s growth forecast for 2023-24 amid expectations of global economic slowdown and monetary tightening by other countries across the Atlantic