Why inflation will matter more in 2025: Explained
The HinduThe story so far: It has been what one may call, a bittersweet year for the economy, with a sweet first half, when growth surprised everyone, including the government. Top government functionaries have been making noises since late November about the need for RBI to cut rates, with some suggesting it should ignore volatile food prices and prioritise growth and investments. The Finance Ministry expected growth to be “over 6.5%” for the full year, as it geared up for an interim Budget ahead of the Lok Sabha polls. “Growth moderated in the April-June quarter as high interest rates temper urban demand,” said Louis Kuijs, Asia-Pacific chief economist at S&P Global Ratings in September. With food prices still a worry and edible oils spurting up, the RBI did not budge on interest rates this month as well, even as it noted the growth-inflation situation is no longer well-poised, slashing its 2024-25 growth projection to 6.6% from earlier hopes of 7.2%.