According to global forecasting firm Oxford Economics, it is stated that the Indian economy is seen recovering faster than expected and the Reserve Bank of India (RBI)  is likely to have come to an end of the rate easing cycle. It is further stated that inflation is expected to average significantly above 6 percent in the fourth quarter (Q4) of the current fiscal and the Central Bank may hold policy rates in December monetary policy review meeting.

"Consumer inflation rose back to pre-virus highs in October, with almost every broad category other than fuel experiencing a rise in prices. While the fourth quarter is likely to mark the peak for inflation, we have turned more cautious on the trajectory over 2021," it added.

Costlier vegetables and eggs pushed up retail inflation to a nearly six-and-a-half-year high of 7.61 percent in October, keeping it significantly above the comfort zone of the RBI. Retail inflation stood at 7.27 percent in September 2020. At the same time, Oxford Economics said, the robust bottom-up activity data suggest that the economy may be recovering faster than we anticipated. As such, we see an increasing possibility that the RBI's easing cycle has ended.

Moody's Investors Service has also revised upwards its GDP forecast for India to (-) 8.9 percent contraction in the 2020 calendar year, as the economy re-flates after a long and strict nationwide lockdown but added the recovery is patchy.

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