Indian economy is facing stagflation: Moody’s

As per the Global financial services firm Moody’s Analytics:

• Indian economy is going through stagflation, with slow growth and high inflation.
• RBI can’t be too aggressive in slashing interest rates.
• WPI inflation rising up to 7.5% every year in May due to supply-side factors may impose further challenges for the RBI.
• Recent descend in the rupee is increasing the prices, especially imported goods priced in dollars.
• WPI related inflation to remain b/w 7% to 8% for next 6 months
  

What is Stagflation?

• Stagflation is a condition when economic growth of a country slows down while inflation is rising. It is a combination of sluggish economic growth, high unemployment and high inflation.

Month: Current Affairs - June, 2012