Inflation increases in July
By Abin Daya The second volume of the Economic Survey for FY 2016-17 was released on Aug 14, and it paints a not so rosy picture of the economy. The Survey says that achieving the targeted 7.5% growth this year will be difficult, due to the increased downside risks to growth. One of the risks is the disruption caused by the implementation of the GST. While the potential upside of this significant tax reform is huge, in the short term, as businesses transition to the new regime, there will be lost production and sales, which will lead to slower growth. We are already seeing that in the lower export growth for the month of July. The Survey also talks about the asset quality ...
Retail inflation falls to multi-year lows
By Abin Daya Dropping inflation and dropping industrial growth – signs of a slowing economy? It might be too early to tell, but it definitely has raised calls from multiple quarters, even from within the government for a rate cut by RBI. We will have to wait and see if the regulator obliges, as there is one school of thought that the low CPI inflation is due to the high base of last year, and hence RBI might wish to wait and see for a couple of months more. Policy announcements have a habit of going against expectations in the recent past, hence we will refrain from making any predictions on the same. This week we talk about the two inflations – ...
WPI inflation declined marginally to 3.39% in Oct
The Dollar Business Bureau Now for the second consecutive month, India’s Wholesale Price Index (WPI) inflation registered a decline, by 3.39% in October 2016 as against the corresponding month of last year. The annual inflation rate stood at 3.57% in September and -3.70% during the corresponding month of the previous year. “Build up inflation rate in the financial year so far was 4.34% compared to a build up rate of 0.45% in the corresponding period of the previous year,” Ministry of Commerce and Industry said in a statement. The official Wholesale Price Index for all commodities rose by 0.1% for the month of October 2016 to 182.9 as against 182.8 in September 2016. The index for food articles group fell 0.3% to 278.8 from 279.6 ...
'Inflation should not prevent RBI from cutting interest rate'
Source: PTI Hours before RBI Governor Raghuram Rajan announces third bi-monthly monetary policy of the fiscal, a top Finance Ministry official has said the central bank should not hesitate in cutting interest rate just on inflationary concerns. The government, he said was keen on bringing down cost of borrowing and RBI cutting its key policy rate will be a trigger for such a move that will boost investment and growth. The Reserve Bank will announce the monetary policy review at 11 am tomorrow. The official said wholesale inflation (WPI) is in negative territory since November and international oil prices, the biggest dampener on domestic commodity prices, are multi-year lows, giving comfort to developing economies like India. Bankers, however feel RBI will ...
