Low inflation, high growth: India's 'sweet spot'
हिंदी में सुनें
Listen to this article in Hindi
India's economy is experiencing a rare phase of near-zero inflation and strong growth. Benefits are uneven, impacting different sectors uniquely.
India's economy is currently in a unique phase: growth is exceeding 8% while inflation is near zero.
The Reserve Bank of India (RBI) has responded by cutting the policy repo rate four times this year, reducing it by a full percentage point. Experts are describing this as a "Goldilocks" moment—strong growth, stable prices, and the flexibility to support the economy.
At first glance, this appears to be unequivocally positive news. Consumer price inflation has fallen to around 0.25%, a record low. Wholesale prices are also declining. GDP growth for the most recent quarter is estimated at approximately 8.2%, with both manufacturing and services contributing significantly.
That said, the reality is a bit more complicated. this macroeconomic environment has varying consequences for different groups within India. While borrowers and large corporations benefit, farmers are experiencing losses due to falling food prices. Savers may see lower returns as interest rates decrease. The situation illustrates a complex economic landscape where the advantages are not evenly distributed.
