The Bank is paying close attention to whether the prolonged fiscal austerity measures and a receding economy would lead to political turbulence or instability in financial markets. Next is developments in the Chinese economy.
There is a view that is becoming widely held that the economy will not return to the level of high growth observed earlier, as policymakers are enforcing their stance of emphasizing “quality-based” rather than “speed-based” growth. It is also likely that the over-capacity issue mainly seen in manufacturing, such as materials, could restrain growth for the time being.