Indian economy is facing stagflation: Moody’s
- 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.