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NEW DELHI: Global financial services firm Moody's on Thursday said Indian economy is facing stagflation, where growth is slow and inflation high, and cautioned that the Reserve Bank cannot be too aggressive in cutting interest rates. "India's economy is in stagflation, with notably weaker growth but inflation still stubbornly high," said Glenn Levine, senior economist, Moody's Analytics.
Amid wholesale price-based inflation ticking up to 7.5% year-on-year in May due to supply-side factors, the agency said it will cause further 'headaches' at the RBI.
"Yet with the inflation numbers now being driven by supply-side factors, and with the currency being pushed downwards...and India's weaker growth prospects, we think that the RBI could cut rates without it putting too much upward pressure on inflation," said Moody's Analytics.
Indian economy is facing stagflation, Moody’s says - The Times of India
Amid wholesale price-based inflation ticking up to 7.5% year-on-year in May due to supply-side factors, the agency said it will cause further 'headaches' at the RBI.
"Yet with the inflation numbers now being driven by supply-side factors, and with the currency being pushed downwards...and India's weaker growth prospects, we think that the RBI could cut rates without it putting too much upward pressure on inflation," said Moody's Analytics.
Indian economy is facing stagflation, Moody’s says - The Times of India
