Inflation and other updates (January 2013)

  • At 7.18% headline inflation is at a three year low
  • Downward movement in the WPI offers respite, the CPI still has an upward movement (10.56%)
  • So there might be limited headroom for the RBI to lower interest rates
  • The Planning Commission has made a case for lower interest rates for attracting investments and reversing the declining trend of economic growth
  • “lowering interest rates and reduction in fiscal deficit is important for the stabilising and growth of the economy.” – Montek

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