1 min read.Updated: 28 Nov 2013, 01:23 AM ISTLivemint
Since the global financial crisis started, growth rates have slipped while inflation has remained high in emerging economies
Much as market experts like to criticize the government for the so-called policy paralysis and other assorted ills afflicting the Indian economy, a look abroad shows that India is in the same boat as Brazil and Indonesia. Since the global financial crisis started in 2008, economic growth rates have slipped while inflation has accelerated or remained at elevated levels in many large emerging economies. That’s because, while local demand-and-supply scenarios are responsible to a large extent for domestic inflation, global liquidity and the depreciation of the local currency also play a part, argues Bank of America Merrill Lynch in a recent note. That also explains why high current-account deficit countries such as India, Brazil and Indonesia are the ones struggling the most to contain rising prices.