{"id":144665,"date":"2021-11-02T20:11:33","date_gmt":"2021-11-02T14:41:33","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=144665"},"modified":"2021-11-02T20:11:33","modified_gmt":"2021-11-02T14:41:33","slug":"mixed-signals-on-growth-inflation-dynamics","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/mixed-signals-on-growth-inflation-dynamics\/","title":{"rendered":"Mixed signals on growth-inflation dynamics"},"content":{"rendered":"\n

Synopsis: <\/strong>The post pandemic trajectory of economy has some trends and facts which are both challenging as well as encouraging.<\/p>\n

Introduction<\/strong><\/h5>\n

The current economic cycle is a rare one, induced by a major public health shock.<\/p>\n

To revive the economy, massive monetary stimulus was provided by various central banks by following loose monetary policy.<\/p>\n

We are now at that point in the cycle where major central banks have begun to signal normalisation from the unprecedented loose monetary policy stimulus.<\/p>\n

However, globally the data signals that the ‘recovery momentum<\/strong>‘ in the first half of 2021 is decelerating<\/strong> in many countries.<\/p>\n

What are the current trends and challenges w.r.t economic recovery?<\/strong><\/h5>\n

–China’s policy<\/strong> and economy is the most salient risk for a sustained global recovery.<\/p>\n

–Inflation<\/strong> in almost all major economies continues to remain high. Crude oil prices<\/strong> remain the biggest concern besides inflation in natural gas, metals, minerals, ores, and select foods.<\/p>\n

-A risk of the global economy going into \u201cstagflation<\/strong>(growth stagnation plus inflation)\u201d.<\/p>\n

In India<\/strong>, RBI notes that \u201cthe external environment, which had been supportive of aggregate demand over the past few months, may lose momentum<\/strong> for a variety of reasons\u201d<\/em> including exports, financial markets volatility and imported inflation.<\/p>\n

What are some trends indicating continuation of economic recovery of India?<\/strong><\/h5>\n

Demand<\/strong> for both consumer non-durables (FMCG) and durables<\/strong> is doing well. Owing to festive season demand for consumer loans is strong.<\/p>\n

As the economy opens up, with risk of a third wave receding, demand for \u201ccontact\u201d services<\/strong> in travel, tourism, entertainment, etc, is evident<\/strong>.<\/p>\n

–Rural demand<\/strong> for FMCG has remained robust, post the rabi harvest, which are likely to continue with the\u00a0 \u00a0 \u00a0 largely normal ongoing kharif crop season.<\/p>\n

–Urban demand<\/strong> is also reviving.<\/p>\n

Real estate<\/strong> is reportedly doing well.<\/p>\n

–Residential real estate<\/strong> is reportedly doing exceptionally well, with low-interest rates on home loans, cuts in stamp duty and registration charges, and behavioural shifts towards own home ownerships.<\/p>\n

–Commercial real estate<\/strong> sector is reviving, with demand from IT, tech, data centres, and city centre warehousing for e-commerce companies.<\/p>\n

Inflation-<\/strong>India’s retail price inflation rate eased to 4.35 percent in September of 2021 mostly due to lower food prices.<\/p>\n

Source:<\/strong> This post is based on the article \u201cMixed signals on growth-inflation dynamics<\/strong>\u201d published in Indian Express<\/strong> on 2nd November 2021.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Synopsis: The post pandemic trajectory of economy has some trends and facts which are both challenging as well as encouraging. Introduction The current economic cycle is a rare one, induced by a major public health shock. To revive the economy, massive monetary stimulus was provided by various central banks by following loose monetary policy. We… Continue reading Mixed signals on growth-inflation dynamics<\/span><\/a><\/p>\n","protected":false},"author":10335,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216],"class_list":["post-144665","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1702198200},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/144665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10335"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=144665"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/144665\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=144665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=144665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=144665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}