Is the Indian economy staring at stagflation?
4 years, 11 months ago

Is the Indian economy staring at stagflation?

The Hindu  

The story so far: The rise in retail price inflation to a nearly six-year high of 7.35% in December has led to increasing worries that the Indian economy may be headed towards stagflation. At the same time, economists argue that an inflation rate beyond a certain level, at which point labour and other resources in the economy are fully employed, will have no employment or growth benefits. The simultaneous presence of high inflation and low economic growth under stagflation, however, challenges the conventional view that inflation helps an economy operate at full capacity. With retail inflation now well above the RBI’s targeted range of 2-6%, the central bank is unlikely to assist the economy any time soon by cutting its benchmark interest rate.

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History of this topic

Stagnant wages amid fast economic growth: We need an Indian Enlightenment
2 days, 16 hours ago

Stagnant wages amid fast economic growth: We need an Indian Enlightenment

Live Mint  

India’s economic growth story has been impressive. Wage stagnation amid rising inflation: The disparity between India’s economic growth and stagnant wages is stark. Chief economic advisor V. Anantha Nageswaran warns that low wages could stifle India’s long-term potential by weakening consumer demand and the quality of life for millions. This is not the template for a ‘Viksit Bharat.’ The paradox …

​Growth chill: On the economy
6 days, 6 hours ago

​Growth chill: On the economy

The Hindu  

The National Statistics Office has confirmed emerging fears about the economy’s evidently sluggish trajectory through this year in its first Gross Domestic Product estimates for 2024-25. While the election-focused first quarter hit public capital spending, the second quarter was marred by weak demand and still underwhelming public capex, dragging GDP growth to a seven-quarter low of 5.4%. The NSO’s projection …

India’s high-frequency indicators recovering in Q3, to lift GDP in H2: RBI December Bulletin
Trending News
3 weeks ago

India’s high-frequency indicators recovering in Q3, to lift GDP in H2: RBI December Bulletin

Live Mint  

Mumbai: Several high-frequency indicators for the third quarter of the current financial year show that the Indian economy is recovering from the slowdown in momentum witnessed in the previous three months ended September, according to a paper in the Reserve Bank of India’s monthly bulletin. The recovery in Q3 of FY25 is being driven by strong festival activity and sustained …

The inflation targeting regime shouldn’t constrain Indian manufacturing
3 weeks ago

The inflation targeting regime shouldn’t constrain Indian manufacturing

Live Mint  

The recently concluded Monetary Policy Review reiterated the concern of high CPI inflation and recommended keeping the repo rate unchanged. The low WPI inflation rate in recent years therefore hides behind it low—and often negative—inflation in investment goods and key intermediate inputs originating from the manufacturing sector. One of the contributing factors to the last cycle of high non-performing assets …

Will India's economic growth pick up pace? Nirmala Sitharaman answers
4 weeks, 1 day ago

Will India's economic growth pick up pace? Nirmala Sitharaman answers

India Today  

Finance Minister Nirmala Sitharaman on Tuesday said that India’s economy will see healthy growth in the coming quarters despite the lower-than-expected GDP numbers for the second quarter. India’s GDP growth for the July-September quarter fell sharply to 5.4% from 6.7% in the previous quarter, marking an 18-month low, as per data released by the National Statistics Office in November. However, …

Retail inflation slows slightly at 5.48%
1 month ago

Retail inflation slows slightly at 5.48%

Hindustan Times  

Retail inflation rose to 5.48% last month, a slower pace of increase compared to 6.21% in October, data from the Ministry of Statistics and Programme Implementation showed on Thursday. Despite the slowing pace of growth in prices, the Consumer Price Index-based rate of retail inflation stayed above the Reserve Bank of India’s 4% tolerance level, with two percentage points of …

RBI must restore balance between inflation, growth
1 month, 1 week ago

RBI must restore balance between inflation, growth

New Indian Express  

Despite the disappointing slump in economic growth, the RBI on Friday left the benchmark policy repo rate unchanged at 6.5 percent amid inflationary pressures. Maintaining a firm stance on inflation control, Governor Shaktikanta Das stressed that the central bank needed “more credible evidence” on the disinflationary process, which he said was getting prolonged and arduous. As Das rightly noted, there …

RBI must restore balance between inflation, growth
1 month, 1 week ago

RBI must restore balance between inflation, growth

New Indian Express  

Despite the disappointing slump in economic growth, the RBI on Friday left the benchmark policy repo rate unchanged at 6.5 percent amid inflationary pressures. Maintaining a firm stance on inflation control, Governor Shaktikanta Das stressed that the central bank needed “more credible evidence” on the disinflationary process, which he said was getting prolonged and arduous. As Das rightly noted, there …

Monetary policy review: RBI should stick to its price stability mandate
1 month, 1 week ago

Monetary policy review: RBI should stick to its price stability mandate

Live Mint  

One of the lingering effects of covid—‘long covid’—is that economic growth has begun to look a bit like the Sensex, albeit in slow motion. So, last fiscal year’s growth looked rosy in large part because growth in 2022-23 had flagged since 2021-22, when it was 9.7% but on a covid-shrunken GDP base of 2020-21. As the US Fed and major …

India’s growth slowdown: Yes, RBI does need to respond
1 month, 1 week ago

India’s growth slowdown: Yes, RBI does need to respond

Live Mint  

The Indian economy is in the midst of a cyclical slowdown. The Indian government is still in the process of getting public finances back into shape after the pandemic shock, when it had to support economic activity even as tax collections collapsed. There is a compelling case for the monetary policy committee, which is meeting this week to decide its …

Unchecked 'sticker shock' from inflation can hurt manufacturing and economy, RBI says
1 month, 3 weeks ago

Unchecked 'sticker shock' from inflation can hurt manufacturing and economy, RBI says

Hindustan Times  

The Reserve Bank of India said if inflation is allowed to run unchecked, it can undermine the prospects of India's economy, especially for industry and exports. The Reserve Bank of India seal is pictured on a gate outside the RBI headquarters in Mumbai, India, February 2, 2016 This comes after the headline consumer price index inflation rose above the upper …

India's Economy Shows Satisfactory Performance in First Half of FY25, But Risks from Geopolitical Conflicts and Global Factors
2 months, 2 weeks ago

India's Economy Shows Satisfactory Performance in First Half of FY25, But Risks from Geopolitical Conflicts and Global Factors

Hindustan Times  

India's economy performed satisfactorily in the first half of the current financial year, according to the finance ministry's monthly economic report released Monday. However, the ministry warned of potential disruptions from geopolitical conflicts, rising geo-economic fragmentation and elevated valuations in financial markets of some advanced economies.

Wrong to assess economic activity on GDP alone: Finance Ministry
1 year, 3 months ago

Wrong to assess economic activity on GDP alone: Finance Ministry

The Hindu  

The Finance Ministry on September 15 scotched aspersions cast by “certain sections” on the credibility of Indian GDP data, which showed a 7.8% uptick in the first quarter of this year, stressing that Indian GDP data is not seasonally adjusted and is finalised three years later so “it is wrong to look at the underlying economic activity based on GDP …

ECONOMIC PERSPECTIVES | Why India is unable to curb inflation
1 year, 4 months ago

ECONOMIC PERSPECTIVES | Why India is unable to curb inflation

The Hindu  

Published : Sep 07, 2023 11:00 IST - 6 MINS READ Even as the Indian government celebrates the high growth rates that the increases in official GDP figures signal, it is haunted by the spectre of inflation. Wheat prices at the consumer level, which were falling relative to the previous year in the months preceding October 2021, started to rise …

Inflation has moderated, but no room for complacency: RBI chief Shaktikanta Das
1 year, 7 months ago

Inflation has moderated, but no room for complacency: RBI chief Shaktikanta Das

India Today  

India's inflation has moderated, but the central bank cannot be complacent towards easing price pressures yet as potential weather-related uncertainties linger, the governor of the Reserve Bank of India said on Wednesday. "The war on inflation is not over; we have to remain alert," Shaktikanta Das said at an event in New Delhi. This month's retail inflation data, scheduled to …

India Likely To Witness Sub-5% Inflation, Average CPI 5.2% This Year: Report
1 year, 8 months ago

India Likely To Witness Sub-5% Inflation, Average CPI 5.2% This Year: Report

News 18  

India will likely witness a sub-5% inflation early this year, with an average rate of CPI at 5.2% for calendar year 23. On the currency front, stronger relative growth outside the US and divergent G-4 policies moves high beta Foreign exchange more concretely to bullish territory vs. USD. The India 10-year benchmark bond yields may ease to see a sub-6.75% …

India's economic growth to slow down considerably this year: Economists
1 year, 8 months ago

India's economic growth to slow down considerably this year: Economists

India Today  

Top global institutions have forecast India to be the fastest-growing economy in FY24, as the country remains resilient from global shocks that have brought major economies to their heels. India’s domestic growth prospects remain robust, but economists feel that there is no escaping the cascading impact of the global economic slowdown, which could hurt various key segments of growth. The …

Indian economy to grow at 7%; inflation set to moderate: Finance Ministry
1 year, 9 months ago

Indian economy to grow at 7%; inflation set to moderate: Finance Ministry

Live Mint  

New Delhi: Indian economy is expected to grow at 7 per cent in FY23 despite global headwinds while retail inflation would moderate in line with wholesale inflation which fell to a 25-month low in January, the Finance Ministry said on Monday. Supported by the gains from high services exports, the moderation in oil prices, and the recent fall in import-intensive …

Retail inflation marginally dips to 6.44 pc in February
1 year, 10 months ago

Retail inflation marginally dips to 6.44 pc in February

Deccan Chronicle  

New Delhi: Staying above the Reserve Bank of India’s upper tolerance level of six per cent for the second straight month, India’s retail inflation marginally dipped to 6.44 per cent in February from January’s three-month high of 6.52 per cent. Inflation is still high on a year-on-year basis where it was seen at 6.07 per cent in February 2022, according …

RBI lifts loan costs to tame inflation
1 year, 11 months ago

RBI lifts loan costs to tame inflation

The Hindu  

The Monetary Policy Committee of the Reserve Bank of India on Wednesday raised the benchmark lending rate by 25 basis points to 6.5% as the RBI targets persistently high core or underlying inflation that it sees as a risk to the improving outlook for the economy. Observing that the rate increases since May were still working their way through the …

Explained | Is the economy driving with the brakes on?
2 years ago

Explained | Is the economy driving with the brakes on?

The Hindu  

The story so far: At this time last December, India’s economy was on the cusp of a fledgling recovery from the COVID-19 pandemic, though the Omicron variant posed fresh speed bumps for the rebound. As JP Morgan managing director and India chief economist Sajjid Chinoy explained at a CII economic policy summit last week, 2022 was expected to see a …

Centre working to slow inflation, FM Nirmala Sitharaman says
2 years, 1 month ago

Centre working to slow inflation, FM Nirmala Sitharaman says

Live Mint  

The government is working to slow inflation further, and is closely monitoring the prices of essential commodities, finance minister Nirmala Sitharaman said, adding that the country is protected from the risk of stagflation due to its relatively slow inflation rates and fast growth. The government will further bring down inflation and is constantly watching the price situation of essential commodities,” …

DC Edit | Promising signs in economy
2 years, 1 month ago

DC Edit | Promising signs in economy

Deccan Chronicle  

The RBI governor Shaktikanta Das-led Monetary Policy Committee hiked the repo rate by 35 basis points to 6.25 per cent — the fifth straight increase in the current cycle since May 2022 — as it seeks to fight global uncertainty and uncomfortable levels of inflation. The RBI governor’s post-policy meeting comments hint that the central government remains focused on inflation, …

Economy resilient, on course to acheive 7% growth in FY23: RBI article
2 years, 1 month ago

Economy resilient, on course to acheive 7% growth in FY23: RBI article

The Hindu  

With headline inflation beginning to show signs of easing, the domestic macroeconomic outlook appears to be resilient and on course for about 7% GDP growth in the current fiscal though India is still sensitive to global headwinds, according to an article released by the RBI on Friday. In the article, the authors - led by RBI Deputy Governor Michael Debabrata …

India likely to see muted GDP growth, high inflation over next few quarters: Experts
2 years, 2 months ago

India likely to see muted GDP growth, high inflation over next few quarters: Experts

India Today  

India is likely to see a slowdown in GDP growth over the next few quarters combined with high inflation, stated an experts’ panel at the India Today Conclave Mumbai 2022 on Saturday. Pranjul Bhandari, Managing Director, Chief India Economist, Asean economist, HSBC, said: “We have done well in the last two quarters directing the post-pandemic growth, but the next few …

Coordinated policy efforts are required to check high inflation rate: RBI MPC member
2 years, 2 months ago

Coordinated policy efforts are required to check high inflation rate: RBI MPC member

India TV News  

Inflation Issue: RBI Monetary Policy Committee member Shashanka Bhide on Friday batted for coordinated policy efforts to address the issue of the high inflation rate. Monetary policy tightening aims to bring down the inflationary pressures Bhide said the monetary policy tightening by the RBI aims to bring down the inflationary pressures as high inflation adversely affects consumption and investment demand. …

Why the RBI is unlikely to slow down in curbing inflation
2 years, 3 months ago

Why the RBI is unlikely to slow down in curbing inflation

Live Mint  

Global growth is slowing rapidly, inflation is stubbornly high and central banks in developed nations are hiking interest rates by magnitudes not seen in decades. At other times, new data sources are introduced to make statistics more accurate, particularly to capture India’s informal sector better. Why the wait for new trade policy just got longer Busted: The myth of India …

Joblessness below pre-COVID levels: Finance Ministry
2 years, 3 months ago

Joblessness below pre-COVID levels: Finance Ministry

The Hindu  

Demand for work under the national rural employment guarantee scheme hit a two-year low in August, signalling that the recovering economy is creating more jobs in rural as well as urban India, the Union Finance Ministry said on Saturday. India’s inflation, the Ministry said, is “in control” and expected to moderate in coming months from the 7% mark in August …

Monthly economic review | India’s growth to be sustained by consumer spending rebound
2 years, 3 months ago

Monthly economic review | India’s growth to be sustained by consumer spending rebound

The Hindu  

A sharp rebound in consumer spending and rising employment will sustain economic growth in India in the months ahead, the government said in its monthly economic review for August published on Saturday. The report also said high levels of foreign exchange reserves, sustained foreign direct investment and strong export earnings have provided a reasonable buffer against monetary policy normalisation in …

Inflation is not a ‘red lettered’ priority for Centre now, says FM Nirmala Sitharaman
2 years, 4 months ago

Inflation is not a ‘red lettered’ priority for Centre now, says FM Nirmala Sitharaman

The Hindu  

Inflation is not a ‘red-lettered’ priority now for the government given that it has been brought down to a ‘manageable level’ over the past two months and job creation and equitable distribution of wealth were instead the key priorities as of now, Finance Minister Nirmala Sitharaman said on Wednesday. “I am not sure I can have the luxury of sequencing …

From the Great Moderation to anxiety over Great Stagflation
2 years, 5 months ago

From the Great Moderation to anxiety over Great Stagflation

Live Mint  

The world economy is undergoing a radical shift. This period is usually explained by central banks’ move to credible inflation-targeting policies after the loose monetary policies of the 1970s and governments’ adherence to relatively conservative fiscal policies. In both cases, inflation initially remained low, given demand shocks, and loose monetary, fiscal and credit policies prevented deflation. Central banks are thus …

Recession in advanced economies may cool prices in India
2 years, 6 months ago

Recession in advanced economies may cool prices in India

Live Mint  

Recessions in advanced economies may benefit India in a “perverse way” as a moderation in global commodities prices will help cool domestic inflation, according to Citigroup Inc.’s head of economics for the country. “India being a net importer of commodities should benefit on the inflation front,” Samiran Chakraborty, managing director and chief economist for India at Citigroup, said in an …

Worry about stagflation, a flashback to ‘70s, begins to grow
2 years, 7 months ago

Worry about stagflation, a flashback to ‘70s, begins to grow

Associated Press  

It was the dreaded “S word” of the 1970s. For Americans of a certain age, it conjures memories of painfully long lines at gas stations, shuttered factories and President Gerald Ford’s much-ridiculed “Whip Inflation Now” buttons. “This time, it is facing high inflation and slow growth at the same time.. It’s a phenomenon — stagflation — that the world has …

Explained | How are fears of stagflation impacting markets?
2 years, 7 months ago

Explained | How are fears of stagflation impacting markets?

The Hindu  

The story so far: Authorities worldwide, particularly central bankers, are feverishly trying to formulate the appropriate set of policies to ensure that inflation, currently running at multi-decade highs in some advanced economies including the U.S., is cooled without triggering a recession. Former Federal Reserve Chairman Ben Bernanke told The New York Timeslast month that he foresaw a period in the …

Expert Explains: What’s the remedy against rising inflation?
2 years, 7 months ago

Expert Explains: What’s the remedy against rising inflation?

The Hindu  

Published : May 30, 2022 06:00 IST Amid all the anxieties in a time of inflation came a moment of brief reassurance, or at least the pretence of it. “Evidence on consumption patterns”, it said, “suggests that inflation in India has a lesser impact on low-income strata than on high-income groups”. By plotting these expenditure patterns onto the rates of …

Retail inflation rises to 7.8%, highest in 8 years
2 years, 8 months ago

Retail inflation rises to 7.8%, highest in 8 years

Hindustan Times  

Retail prices grew at 7.8% in April, the highest since the Narendra Modi-led National Democratic Alliance government assumed power in May 2014, squeezing household budgets, potentially affecting consumer confidence, and setting the stage for more monetary action by the Reserve Bank of India’s Monetary Policy Committee which raised the rate last week to combat spiking inflation. Experts believe that this …

Inflation quickens to an almost 8-year high, less impact on low income households says Finance Ministry
2 years, 8 months ago

Inflation quickens to an almost 8-year high, less impact on low income households says Finance Ministry

The Hindu  

Inflation faced by Indian consumers shot up to a nearly eight-year high of 7.8% in April from 6.95% in March, with rural inflation accelerating to 8.4% and urban parts of the country experiencing 7.1% inflation, as per data released by the National Statistical Office on Thursday. Economists said the sharp jump in retail inflation explains the central bank’s rush to …

‘Inflation is the biggest challenge now’
2 years, 8 months ago

‘Inflation is the biggest challenge now’

The Hindu  

Inflation is now the biggest challenge for India’s policy makers rather than the U.S. Federal Reserve’s taper programme and measures like interest rate increases to stem rising prices could dent the fledgling consumption demand recovery from the pandemic not just in India but globally, a senior official said on Wednesday. “The nearly 7% inflation print for March came four days …

Is the Reserve Bank doing enough to rein in inflation? | The Hindu Parley podcast
2 years, 9 months ago

Is the Reserve Bank doing enough to rein in inflation? | The Hindu Parley podcast

The Hindu  

India’s inflation, which is measured by the Consumer Price Index, has stayed above the Reserve Bank of India ’s upper tolerance limit of 6% for three months running. The central bank’s monetary policy committee decided to hold benchmark interest rates earlier this month, choosing to remain accommodative “while focussing on withdrawal of accommodation to ensure that inflation remains within the …

Growth pangs: The Hindu Editorial on World Bank growth forecast for India
2 years, 9 months ago

Growth pangs: The Hindu Editorial on World Bank growth forecast for India

The Hindu  

The World Bank pared its 2022 growth projections for South Asian economies to 6.6% on Wednesday, from an estimate of 7.6% released in January, emphasising that post-pandemic growth was already uneven and fragile before the Russia-Ukraine conflict triggered fresh challenges. The ripple effect of high oil and food prices that prevailed even before the war and were exacerbated since February …

RBI Raises Inflation Forecast to 5.7% for FY23 from 4.5% earlier; Know Details
2 years, 9 months ago

RBI Raises Inflation Forecast to 5.7% for FY23 from 4.5% earlier; Know Details

News 18  

The Reserve Bank of India on Friday revised upwards its retail inflation forecast to 5.7 per cent for the current financial year 2022-23, as compared with the 4.5 per cent projected earlier. “Their pass-through to retail prices, therefore, warrants continuous monitoring and pro-active supply management.” Das stated, “Taking into account these factors and on the assumption of a normal monsoon …

What is stagflation and will it hit Australia's economy again?
3 years, 2 months ago

What is stagflation and will it hit Australia's economy again?

ABC  

Australians are concerned about inflation. "I think policymakers struggled to understand stagflation partly because, at the time, economic theory and conventional wisdom didn't comprehend that you could have the two together," he told the ABC. "So they thought economies had spare capacity and room to grow further, which meant that they pursued stimulatory monetary and fiscal policies, and the result …

Stocks week ahead: Stagflation rocked the economy before. Is it coming back?
3 years, 3 months ago

Stocks week ahead: Stagflation rocked the economy before. Is it coming back?

CNN  

A version of this story first appeared in CNN Business’ Before the Bell newsletter. “Although not our base case, stagflation has often been accompanied by oil shocks, and with crude prices recently jumping on supply chain disruptions, the risk of oil shocks has increased,” Kwon and Subramanian said. “Unlike the rest of our community, these people” — those on the …

Inflation: The contrasting tale of India and the US
3 years, 5 months ago

Inflation: The contrasting tale of India and the US

Hindustan Times  

Retail inflation is making news in both United States and India. Composition of CPI indices in US and India is different Retail inflation, by definition, is a measure of change in prices of commodities consumed by the representative household in an economy. Base effect is a much bigger factor in US inflation than India Since the pandemic inflicted a huge …

Indian economy, hit by COVID-19, shrinks by 7.3% in 2020-21
3 years, 7 months ago

Indian economy, hit by COVID-19, shrinks by 7.3% in 2020-21

Associated Press  

NEW DELHI — India’s economy, pummeled by the coronavirus pandemic, contracted by 7.3% in the 2020-21 financial year, just before the country was hit by another catastrophic surge in infections. Daily new cases set global records, spurring many states to announce widespread restrictions and lockdowns. In January, a government survey estimated the economy -- previously one of the fastest growing …

Will covid-19 halt India’s economic recovery once again?
3 years, 9 months ago

Will covid-19 halt India’s economic recovery once again?

Live Mint  

After months of erratic economic performance, India’s economic momentum had picked up pace last February, only to be stopped on its tracks by a global pandemic. Mint’s macro tracker shows a steady improvement in economic indicators over the past few months but a renewed surge in infections once again poses a threat to economic activity and investor sentiments. Launched in …

Explained: 4 factors that could disrupt India's economic recovery
3 years, 9 months ago

Explained: 4 factors that could disrupt India's economic recovery

India Today  

A fresh set of hurdles could once again hurt the Indian economy after it staged a better-than-expected recovery following the Covid-19 crisis. Several brokerages had estimated the country’s economy to register over 10 per cent GDP growth in FY22 but some fresh challenges could disrupt growth in the near-term. Read | India's GDP growth turns positive, but experts caution against …

India's economy expands 0.4% in Oct.-Dec., ending recession
3 years, 10 months ago

India's economy expands 0.4% in Oct.-Dec., ending recession

The Independent  

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. Read our privacy policy India’s economy expanded by a …

India should worry about its public debt
3 years, 11 months ago

India should worry about its public debt

Live Mint  

NEW DELHI : Till 1972, India’s general debt—for the Centre and states—rose steadily to about 39% of gross domestic product and then fell sharply in 1974. Remember that the granular security level data for the Centre and states allows us to paint a much more accurate picture of the interest rate component’s contribution to changes in public debt. As our …

Indian economy reviving at unforeseen pace: RBI
4 years ago

Indian economy reviving at unforeseen pace: RBI

India TV News  

As economic activities gather momentum and strive to get back to pre-Covid levels, the Reserve Bank of India has said that the Indian economy is reflating at a pace higher than most predictions. The monthly bulletin of the central bank for December said more evidence has emerged since the last bulletin which shows that the Indian economy is coming out …

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