Question 1

Сценарий A: Escalation?

Accepted Answer

Scenario Analysis Scenario A (Escalation) — 50% The FM's public statement regarding debt-GDP target recalibration could trigger a market reaction, potentially leading to increased borrowing costs for the government and a decline in investor confidence. This escalation might be confirmed by: * A sharp rise in bond yields: Indicating investors are demanding higher returns for holding government bonds due to perceived increased risk. * A weakening of the rupee: As capital flight intensifies, the currency's value could depreciate against major currencies, impacting import costs and inflation. Scenario B (Status Quo) — 38% The FM maintains a cautious approach towards debt-GDP target recalibration, leading to limited immediate market impact. This scenario is confirmed by: * A steady pace of government borrowing: Limited changes in t (50% model probability, not a guarantee)

Question 2

Сценарий B: Status Quo?

Accepted Answer

Scenario Analysis Scenario A (Escalation) — 50% The FM's public statement regarding debt-GDP target recalibration could trigger a market reaction, potentially leading to increased borrowing costs for the government and a decline in investor confidence. This escalation might be confirmed by: * A sharp rise in bond yields: Indicating investors are demanding higher returns for holding government bonds due to perceived increased risk. * A weakening of the rupee: As capital flight intensifies, the currency's value could depreciate against major currencies, impacting import costs and inflation. Scenario B (Status Quo) — 38% The FM maintains a cautious approach towards debt-GDP target recalibration, leading to limited immediate market impact. This scenario is confirmed by: * A steady pace of government borrowing: Limited changes in t (37% model probability, not a guarantee)

Question 3

Сценарий C: De-escalation?

Accepted Answer

Scenario Analysis Scenario A (Escalation) — 50% The FM's public statement regarding debt-GDP target recalibration could trigger a market reaction, potentially leading to increased borrowing costs for the government and a decline in investor confidence. This escalation might be confirmed by: * A sharp rise in bond yields: Indicating investors are demanding higher returns for holding government bonds due to perceived increased risk. * A weakening of the rupee: As capital flight intensifies, the currency's value could depreciate against major currencies, impacting import costs and inflation. Scenario B (Status Quo) — 38% The FM maintains a cautious approach towards debt-GDP target recalibration, leading to limited immediate market impact. This scenario is confirmed by: * A steady pace of government borrowing: Limited changes in t (14% model probability, not a guarantee)