INFLATION RATE
Business activity hits a 3-month high in November despite cost pressures
India's business activity rose to a three-month high in November. The HSBC Flash India Composite Purchasing Managers Index reached 59.5. This growth was driven by increased business gains and export sales. Both the manufacturing and services sectors experienced expansion. However, businesses also faced rising cost pressures, leading to increased selling charges.
Robust services drive India's business activity to 3-month high in Nov, cost pressures grow
India's business activity surged in November, hitting a three-month high thanks to a booming services sector and record job creation. Despite this positive trend, inflation has reached a near 12-year peak, driven by rising input costs across industries. While businesses remain optimistic, the soaring inflation may prompt the Reserve Bank of India to maintain its cautious stance on interest rates.
Stable inflation is important to sustain growth: RBI Guv Das
RBI Governor Shaktikanta Das reaffirmed the central bank's commitment to achieving the 4% inflation target, effectively ruling out immediate rate cuts. His comments come amidst calls for rate reductions from government officials. While acknowledging the need for growth, Das emphasized price stability as crucial for sustainable economic progress, particularly for the Global South.
RBI committed to moderate inflation to mandated 4%, dashing hope of a rate cut
RBI Governor Shaktikanta Das stated that the central bank is committed to achieving the 4% inflation target. He emphasized that macroeconomic stability is a shared responsibility of the central bank and the government. Das highlighted the importance of price stability for sustained growth. He acknowledged the challenges faced by the global economy and the need for careful policymaking.
Price stability bedrock for sustained growth: RBI Guv Shaktikanta Das
Reserve Bank Governor Shaktikanta Das emphasized the importance of price stability for sustained economic growth. He stated that the RBI is committed to bringing down retail inflation to 4% on a durable basis. Das highlighted that the central bank's focus is on anchoring inflation expectations and ensuring the effective transmission of past rate actions to the broader economy.
Fed governors stake out competing views of inflation risk
Federal Reserve Governors Michelle Bowman and Lisa Cook expressed differing views on future monetary policy. While Bowman urged caution due to persistent inflation, Cook expressed confidence in continued easing of price pressures. Their perspectives highlight the factors influencing the Fed's decision on a potential interest rate cut at its December meeting.
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RBI warns unchecked inflation could harm India's real economy, despite strong growth outlook
Despite festive spending and a recovering agricultural sector boosting the Indian economy, rising inflation threatens to undermine growth, particularly in industry and exports, according to RBI researchers. While financial markets experience corrections due to a strengthening US dollar and foreign investment outflows, the RBI remains committed to price stability and growth.
RBI wary of more than just food inflation: What else is a headache for Das & Co
The Reserve Bank of India is concerned about rising core inflation. Core inflation, excluding volatile items, rose to 3.8 percent in October. The central bank says rising costs are impacting consumers and businesses. The RBI's Monetary Policy Committee may consider this trend in its December meeting. The government is urging the RBI to cut interest rates to boost the economy.
Growth likely to have slowed in Q2 but no significant downside risk to FY25 projections: DEA
India's economic growth may have slowed down recently. However, the economy is still projected to grow between 6.5% to 7% this fiscal year. Data on e-way bills and e-invoices support this projection. Food prices have been a concern, but inflation is not a major challenge. Government capital expenditure may be slightly lower than initially projected.
Morgan Stanley lowers India's growth aim for FY25; economy may expect a better Q3 show with wedding season
Morgan Stanley has revised India's FY25 growth forecast to 6.7%, down from 7%, citing weaker-than-expected second-quarter data. Despite the downgrade, the firm anticipates a rebound in the second half, fueled by government spending and improved agricultural output. Inflation is expected to moderate, prompting potential rate cuts by the Reserve Bank of India in April.
Tribal state Chhattisgarh has highest inflation in India, Delhi lowest: Govt's NSO data
Chhattisgarh had the highest inflation rate in India in October. Bihar followed closely behind. Food prices were a major factor in the rising inflation. Half of Indian states and Union territories had inflation rates above 6%. The high inflation rates have sparked debate about the role of the Reserve Bank of India in managing inflation.
India in a sweet spot: Moody's report highlights robust economic growth momentum amid inflation challenges
India's economy is experiencing robust growth, projected to hit 7.2% in 2024, driven by strong consumer spending and investment. Despite recent inflation spikes due to food prices, Moody's predicts moderation and highlights India's strong economic fundamentals and resilient financial position.
Wholesale inflation quickens to 2.36% in October over rising food prices
India's wholesale price index rose to 2.36 percent in October. Food prices increased, pushing retail inflation to a 14-month high. The Reserve Bank of India held its benchmark interest rate steady. The central bank maintained its inflation forecast for the fiscal year at 4.5 percent. Food price volatility remains a concern for inflation and economic stability.
RBI should definitely cut interest rates, says Commerce Minister Piyush Goyal
Commerce Minister Piyush Goyal called for the Reserve Bank of India (RBI) to cut interest rates, arguing that food inflation should not be the sole factor in such decisions. He expressed his personal view, noting that inflation is expected to decline by December. Goyal also urged investors to take a long-term perspective, following recent Foreign Institutional Investor (FII) selling trends.
Expanding supply capacity will contain inflationary pressure, RBI's inflation target credible: S&P
S&P Global Ratings believes India's expanding supply capacity, particularly in manufacturing, will curb inflation. They expressed confidence in the Reserve Bank of India's ability to manage inflation despite it currently exceeding the target range. Consumption, largely fueled by urban spending, is expected to drive the heavily domestically reliant Indian economy, with a need to enhance agricultural productivity and workforce skills.
If we exclude vegetable prices, CPI inflation remains in RBI's range: UBI research
India's retail inflation surged to a 14-month high of 6.21% in October, fueled by soaring food prices, particularly a 42.18% jump in vegetable costs. A Union Bank report attributes the spike to seasonal factors and expects a correction, but highlights concerns over rising edible oil and cereal prices.
Rate cut unlikely even in February, inflation to dip January onwards: SBI research
The Reserve Bank of India may not reduce interest rates in February. Inflation is a concern. SBI Research predicts inflation will ease slightly from January. However, this easing will be due to base effects and not lower prices. Food inflation, particularly for vegetables, remains high in many states. SBI Research believes the first rate cut will happen after February 2025.
India's retail inflation in October quickens to 6.21%, breaches RBI tolerance band for first time since Aug 2023
India's retail inflation rose to 6.21 percent in October. This is a significant increase from September's 5.49 percent. Food prices are the main reason for this surge. This is the first time since August that inflation has gone beyond the Reserve Bank of India's 6 percent limit. The rise in onion prices is a major concern.
CPI inflation is likely to breach 6% in October: UBI report
The continued spurt in food prices and fading of the high base effect likely led to a spike in October retail inflation figures. According to a report by the Union Bank of India, retail inflation based on the Consumer Price Index is seen jumping to 6.15 per cent, breaching RBI's 6 per cent tolerance band.
RBI rate cut on cards? The inflation 'horse' is still a concern for Shaktikanta Das
RBI Governor Shaktikanta Das cautioned against interpreting the recent shift to a neutral monetary policy stance as a signal for imminent rate cuts. Despite speculation, Das emphasized that reducing interest rates now would be risky given the "significant upside risks to inflation.
Strong demand revives India services PMI in October
India's service industry saw renewed growth in October, driven by strong demand and job creation, according to a recent business survey. This positive trend suggests a strong start for the economy in the final quarter of the fiscal year, supporting predictions of 7% growth. The surge in demand also led to increased hiring and price hikes, potentially impacting inflation.
India's factory growth accelerates in October, PMI shows
India's manufacturing sector saw significant growth in October after three months of slowdown. Improved demand boosted job creation and a positive business outlook. New orders, both domestic and international, surged. Despite higher inflation, the outlook remains optimistic with increased hiring and strong consumer demand expected to continue.
Inflation worries trump lone vote to boost growth, highlights RBI MPC's minutes
Nagesh Kumar advocated for a rate cut to revive demand and investment amid economic uncertainty during the early October MPC review. Despite Kumar's argument for normalization, five members, including RBI Governor Shaktikanta Das, voted to maintain the repo rate, citing inflation concerns.
India cannot risk another bout of inflation: RBI Governor Das
India's central bank, led by Governor Shaktikanta Das, opts for a flexible approach to monetary policy. The Reserve Bank of India maintains the benchmark interest rate at 6.5%, shifts its stance to 'neutral,' and prioritizes price stability amid inflation concerns and global uncertainties.
Rate hikes since May '22 helped reduce inflation by 1.60%: RBI paper
A paper by senior Reserve Bank of India (RBI) staff revealed that the central bank's cumulative rate hikes of 2.5 percentage points since May 2022 have negatively impacted headline inflation by 1.60%. The study, which does not reflect the official views of the RBI, indicated that these rate increases have helped anchor inflation expectations and modulate aggregate demand, resulting in disinflationary effects.
Experts foresee minimal impact on retail inflation
Increasing the minimum support price for rabi crops will have a minimal effect on retail inflation. Economists estimate a slight rise in Wholesale Price Index and Consumer Price Index. Wheat, chana, mustard, and masoor weights influence this, but the overall inflationary impact is expected to be small, between 0.18-0.20% for the year.
India rate cuts seen delayed to 2025 after Sept inflation spike, say economists
India's retail inflation surged in September, leading economists to anticipate a delay in rate cuts until the first half of 2025. The Reserve Bank of India maintained rates at 6.5% but changed its stance to neutral. Rising food prices and growth concerns influence inflation predictions and potential delays in rate reduction.
India¡¯s rate-cut calls at risk after inflation picks up sharply
Economists are adjusting their forecasts as India's inflation surged due to higher food prices, with rates now likely to remain unchanged in December. The RBI's neutral stance and concerns over achieving a 4% target inflation level are influencing the expected timeline for potential rate cuts.
Food on boil, retail inflation hits nine-month high of 5.5%
India's retail inflation climbed to a nine-month high of 5.5% in September, fueled by a rise in food prices and an unfavorable base effect. This turnaround from previous lows in July and August dampens chances of imminent interest rate cuts by the RBI. The Monetary Policy Committee signals potential rate adjustments depending on inflation trends.
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