Policymakers couldn’t have had it better. Economic impulses in India’s economy are exhibiting signs of strength even as inflation has been under the Reserve Bank of India’s (RBI) 2% lower threshold for three months out of four; government data issued on Wednesday showed it dipped to a record-low of 0.25% from a year earlier in October.
Policymakers couldn’t have had it better. Economic impulses in India’s economy are exhibiting signs of strength even as inflation has been under the Reserve Bank of India’s (RBI) 2% lower threshold for three months out of four; government data issued on Wednesday showed it dipped to a record-low of 0.25% from a year earlier in October.
Policymakers couldn’t have had it better. Economic impulses in India’s economy are exhibiting signs of strength even as inflation has been under the Reserve Bank of India’s (RBI) 2% lower threshold for three months out of four; government data issued on Wednesday showed it dipped to a record-low of 0.25% from a year earlier in October.
Though such low inflation can be suggestive of weak demand, that isn’t the case right now. This dip is driven, in part, by a high statistical base. As this normalizes, inflation will rebound, although it is still seen staying at comfortable levels.
That strengthens the case for RBI to lower interest rates when it next reviews them in December. To its comfort, food prices are falling amid plentiful rainfall, which has also helped cool broader inflation.
Meanwhile, the economy is growing healthily, but the overhang of uncertainty due to America’s tariffs has got economies worldwide preparing for any shock. In India, private investment is still a worry despite signs of pick-up.
The government has lowered taxes to stimulate consumption. Expectations will now grow for RBI to join hands by cutting borrowing costs further and encourage investments.