Seeking Alpha

India suffers stagflationary trends

  • Indian CPI rose 11.2% in November and exceeded consensus of 10%, while industrial production fell 1.8% in October vs expectations of -1.2%.
  • The trends exacerbate the dilemma for the Reserve Bank of India, which is due to meet next week, about how to bring down inflation against a background of weak growth.
  • The data "paint a stagflationary picture of the economy where despite weaker growth, inflation remains elevated due to supply-shocks," says Nomura economist Sonal Varma.
  • The Sensex is -0.7%, while the USD-INR is -0.2% at 62.071 rupees.
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