Bonds Firm A Little, Stronger Than Expected GDP Crosses After Close

INR government bonds finished in the region of 2-4bp richer come the close of local trade.

• India's GDP rose by 6.1% Y/Y in Q1, comfortably beating the +5.0% median estimate seen in the Bloomberg survey (the highest estimate was +5.7%). The annual 2023 GDP growth estimate sits at +7.2% Y/Y vs. the +7.0% foreseen in the same BBG survey. This data crossed after the close of local bond markets.
• Also note that India’s FY23 deficit sat at 6.4% of GDP, meeting the government’s target.
• Lower crude oil prices and core global FI dynamics factored into the move lower in Indian yields on Wednesday.
• In the background, RBI Deputy Governor Jain noted that central bank often comes across “serious issues” that “frequently surprise” directors on the board of banks. These issues include non-compliance, divergences from non-performing assets classification norms and gaps in internal controls and information technology systems. While this wouldn’t have been particularly market moving today it is a point that is worth remembering.