India's Inflation at 2 year low of 7.47%.

Discussion in 'Economy & Infrastructure' started by Poseidon, Jan 16, 2012.

  1. Poseidon

    Poseidon Regular Member

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    Inflation at 2 year low of 7.47%.
    Sidhartha, TNN | Jan 16, 2012, 11.53AM IST

    NEW DELHI: Inflation based on the wholesale price index slowed to 7.47% in December, compared to 9.11% in the previous month.

    This is the slowest pace of price rise in two years and is expected to ease the pressure on the Reserve Bank of India (RBI) to cut interest rates. With industrial growth too picking up, RBI is widely expected to keep a pause on rate action when it reviews the policy later this month.

    The moderation in december was due to easing of food prices. Primary articles inflation slowed to 3.1% from 8.5% in November.

    Inflation in the manufactured goods and fuel and power sector eased only marginally, keeping the pressure.

    In the manufactured goods segment, inflation rate moderated to 7.4% in December from 7.7% a month ago.

    For fuel and power, the data released at noon showed the rate of inflation slowed to 14.9% from 15.5% in December.

    ToI reported on Monday that inflation will be of the order of 7.4-7.5%.

    The latest numbers will provide relief to housewives who have been grappling with high inflation as policy action has been weak.

    Inflation at 2 year low of 7.47% - The Times of India
     
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  3. Poseidon

    Poseidon Regular Member

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    Good news.Looks like RBI's policy has worked.
     
    Last edited: Jan 16, 2012
  4. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

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    but this will slow the economy if followed for to long. High interests rates effect business and growth in the long run and they cant hold on to this without creating serious side effects.

    More over this is not low by any measure, 2% is the correct limit.
    Play this game by EU bank.
    http://www.ecb.int/ecb/educational/economia/html/index.en.html
     
    Last edited: Jan 16, 2012
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  5. Godless-Kafir

    Godless-Kafir DFI Buddha Senior Member

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    People should play the above game to get how hard it is to control inflation without damaging the growth rate.
     
  6. Ray

    Ray The Chairman Defence Professionals Moderator

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    Great statistics.

    How is it being translated to the market where the am admi benefits when he buys his daily necessities?
     
  7. Daredevil

    Daredevil On Vacation! Administrator

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    Nothing to be really happy about. This is only temporary seasonal effect as there is more availability of vegetables, fruits etc during this time. Other segments haven't shown any significant decrease in inflation.

    At the same time RBI is literally killing SME industries with its hare-brained policies of increasing interest rates. While the industries across the world are getting loans at cheaper rates, Indian industries are getting loans at double that of global interest rates. How will our companies compete and produce manufactured goods at reasonable rates. In addition there is also power holidays, red tape and other bureaucratic hurdles for the industries to work efficiently.
     
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  8. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    I would prefer less growth and less inflation compared to more growth and more inflation.
     
  9. Daredevil

    Daredevil On Vacation! Administrator

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    What we are going through now is slower growth and higher inflation. We need more growth to keep as many people as possible out of poverty by providing jobs - both skilled and unskilled. Our inflationary problems are not due to growth but due to lack of infrastructure, supply chain bottle necks and lack of economic reforms.
     
  10. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Nothing will happen unless you cut down the interest rates. Bankers are saying that it will happen only after April.

    FY 2012 budget is going to miss all the targets anyways.
     
    Last edited: Jan 16, 2012
  11. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    RBIs policy was to slow economic growth?
     
  12. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    exactly, imagine!!!

    but then this is india. they dont address the supply but kill the demand.
     

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