{"id":146542,"date":"2021-11-13T20:42:34","date_gmt":"2021-11-13T15:12:34","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=146542"},"modified":"2021-11-13T20:42:34","modified_gmt":"2021-11-13T15:12:34","slug":"us-inflation-and-impact-on-india","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/us-inflation-and-impact-on-india\/","title":{"rendered":"US inflation and impact on India"},"content":{"rendered":"\n
What is the news?
\n<\/strong><\/h5>\n

Retail inflation in the US spiked to 6.2% in October 2021. India\u2019s National Statistical Office (NSO) data shows that retail inflation rose to 4.5% for the same month.<\/p>\n\n\n\n
Must Read<\/strong>: Inflation and other related concepts – Explained<\/span><\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
What has caused the inflation surge in the US?<\/strong><\/h5>\n

Usually, inflation spikes can be assigned to either an increase in demand or a decrease in supply. In the US, both factors seem to be responsible.<\/strong><\/p>\n

Reasons for Increase in Demand<\/strong><\/p>\n

1) Sharp recovery: <\/strong>Due to the Rapid rollout of the Covid-19 vaccination drive. 2)<\/strong> Social security Measures<\/strong>: Billions of dollars were pumped by the government to provide relief to consumers, those who lost their jobs, and to stimulate demand<\/p>\n

Reasons for decrease in Supply<\/strong><\/p>\n

1). Decreased industrial production<\/strong>: due to widespread lockdowns and disruption caused by the pandemic. 2).<\/strong> The slow pace of supply chain recovery <\/strong>worsened the mismatch between demand and supply, thus triggering a sustained price rise.<\/p>\n

While the US has seen the sharpest increase in prices, inflation has affected policymakers across most of the major economies, be it Germany, China, or Japan.<\/p>\n

What is happening in India?<\/strong><\/h5>\n

India was one of those rare major economies where high inflation was present before the pandemic. The pandemic made the matters worse because of supply constraints.<\/p>\n

As a consequence, India\u2019s retail inflation has stayed above or near the RBI\u2019s upper limit.<\/p>\n

However, in the last couple of months, the headline retail inflation rate has decreased down to below 5%.<\/p>\n

While the overall inflation average appears quite manageable at present, it is the \u201ccore\u201d inflation that is worrying policymakers now that is now over 6%.<\/p>\n

Why is US inflation a matter of concern for India?<\/strong><\/h5>\n

Imported inflation: <\/strong>When prices increase globally, everything that is imported will become costlier too.<\/p>\n

Indian firms trying to raise money outside India will find it costlier: <\/strong>Because to control inflation, the central banks of advanced economies will resort to a tight monetary policy, i.e. credit will become costlier due to higher interest rates.<\/p>\n

A further increase in inflation in India<\/strong>: RBI will also have to align its monetary policy at home by raising interest rates domestically. That, in turn, may further raise inflation because the production costs would go up.<\/p>\n

Source:<\/strong> This post is based on the article \u201cUS inflation and impact on India<\/strong>\u201d published in Indian Express<\/strong> on 13th Nov 2021<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

What is the news? Retail inflation in the US spiked to 6.2% in October 2021. India\u2019s National Statistical Office (NSO) data shows that retail inflation rose to 4.5% for the same month. Must Read: Inflation and other related concepts – Explained What has caused the inflation surge in the US? Usually, inflation spikes can be… Continue reading US inflation and impact on India<\/span><\/a><\/p>\n","protected":false},"author":10316,"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-146542","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":1700812116,"cached_date":1704835348},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/146542","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\/10316"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=146542"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/146542\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=146542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=146542"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=146542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}