Indian economy is facing stagflation: Moody’s

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

  • 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.

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