India inflation

Infosys kicked off earnings season on Tuesday morning and inflation numbers were released later in the day, putting the spotlight on business and the macroeconomy in India.

Beyondbrics took a look at the latest opinion polls and the more charismatic but yet less politically active of the Gandhi siblings – Priyanka Gandhi. Continue reading »

Raghuram Rajan, governor of the Reserve Bank of India, may be right when he dismisses the link between inflation and growth – if Indian shoppers are anything to go by.

Rajan has been hiking the repo lending rate since he took office in September, looking to control inflation. And quite right too, says KPMG: it seems that high inflation is hitting consumer confidence in Asia’s third largest economy. Continue reading »

Raghuram Rajan, governor of the Reserve Bank of India (pictured), rarely fails to surprise.

He wished everyone “happy new year” with a 25 basis point hike in the repo lending rate on Tuesday – bringing it to 8 per cent – and added the woeful statement that economic growth would lose momentum in the third quarter of the current financial year.

The decision to hike rates goes against expectations, with economists in a Reuters poll last week forecasting that Rajan would hold steady. Continue reading »

As India’s current account deficit ballooned to unsustainable levels last year, the government slammed the breaks on gold imports with duty hikes and new rules on re-export of the yellow metal. The result was that the jewellery industry hit a standstill.

However, according to Pakistani authorities, India’s official inflows of gold have simply shifted to unofficial channels. Time for action. Continue reading »

India rejoice! Vegetable prices are easing up. That’s helping bring inflation down to single digits. It’s good news for the public and even better news for the government, given high food prices can prove make or break ahead of general elections.

But is this enough to keep the Reserve Bank of India (RBI) from raising rates again later this month? Continue reading »

Surprise! On Wednesday, India’s central bank kept the repo lending rate steady at 7.75 per cent and the cash reserve ratio at 4 per cent.

That went against the expectations of investors, analysts and economists who thought Raghuram Rajan, the governor of the Reserve Bank of India, would raise interest rates once again to crack the whip on inflation. Continue reading »

Counting them

India’s November inflation – the Wholesale Price Index version – is out and, once again, the news is worse than expected.

Year-on-year prices were up 7.52 per cent, compared with the 7 per cent forecast by Bloomberg and clocked in the previous month. Along with the Consumer Price Index (CPI) data released last week, it suggests the Reserve Bank of India (RBI) will indeed hike the repo lending rate on Wednesday. Continue reading »

Those were the days

At the stroke of midnight on New Year’s eve 2012, many private clubs and bars in India held a minute’s silence and others cancelled parties altogether, to mark the horrific gang rape of a 23 year-old student in the nation’s capital.

One year on, it seems women’s safety remains an issue. Much of India’s urban population is choosing to bring in the New Year at home this year. Continue reading »

Just when investors were becoming optimistic about the Indian economy – and its markets – it looks like inflation is ticking up and industrial production has gone into decline.

Data out on Thursday indicate that consumer price inflation (CPI) in India is gaining pace. The CPI figure came in at 11.24 per cent in the month of November, up from 10.09 per cent in October and well ahead of a forecast of 10 per cent in a Reuters poll of analysts. Continue reading »

Raghuram Rajan, the new governor of the Reserve Bank of India, struck a firmly hawkish pose on Friday with a surprise 25 basis point increase in the bank’s repo interest rate to 7.50 per cent, confounding a consensus prediction of no change. Continue reading »

How do you measure that?

Here’s a growing dilemma for India’s policy makers.

According to the Wholesale Price Index, inflation picked up in the month of August to 6.1 per cent from 5.8 per cent in July. On the other hand, the (newer) Consumer Price Index indicates that inflation slowed in the same month, moderating from 9.6 per cent to 9.5 per cent.

Why the divergence? And which of these disparate measures should policy makers be looking at? Continue reading »

The Wholesale Price Index, India’s benchmark measure of inflation, pushed up to a 6-month high of 6.1 per cent in August, from 5.8 per cent in July.

It’s not what was forecast, as a good monsoon was expected to bring down food prices. Analysts at ANZ was expecting a figure of 5.7 per cent and Barclays 5.8 per cent. But it didn’t turn out as predicted. Continue reading »

When we think of Groupon, the US-based daily deals website, it’s usually for cut-price getaways, budget fine dining or an affordable day of paragliding – and the sacking of its 32-year-old founder.

But what about onions? Continue reading »

Is this a worry for India?

Having fallen gradually over the past nine month, Wholesale Price Index inflation rose to 4.86 per cent in India this June. That’s up from 4.7 per cent in May but still below the 7.58 per cent inflation recorded in June last year. It was also under the average forecast of 4.90 per cent in a Reuters poll of analysts. Continue reading »

Ratings agency S&P has warned that the chances of India’s sovereign credit being downgraded to junk is more than one in three, as the economy battles with unsustainable current account and fiscal deficits.

But foreign institutional investors (FIIs) see reasons for cheer as growing inflows send Indian equity markets soaring. On Monday, India’s benchmark Nifty index surged 31 points to 6,229.45, its highest since November 2010. The Sensex too gained 163 points to 20,443.62, its highest since January 2011. Both indices have gained in every session in the past week. What’s going on? And will this rally last? Continue reading »