Inflation may hamper the recovery of the economy

0
267

Inflation may affect the recovery of the Indian Economy

CMIE or Centre for Monitoring Indian Economy data shows that overall unemployment rose to 7.75 percent from 6.86 percent in October, as rural unemployment rose to 7.91 percent in October from 6.06 percent in the previous month.

Rising prices and higher input costs may affect demand, which will slow recovery in the next few months. Demand is low in areas such as two-wheelers, but this is worrying.

Increased prices usually result in lower demand, and increased demand usually leads to an increase in supply. However, the supply of different products responds differently to demand, and the demand for some products is less sensitive to price than others.

The sharp decline in tractor sales in October raises concerns about the state of the rural economy. An analysis by Bank of America reveals that the growth in rural wages has slowed to an average of 2.7% in April-July, compared to 7.4% in the same period last year. In addition, the decline in non-agricultural wages is sharper than in agricultural wages.

Centre for Monitoring Indian Economy (CMIE) data shows that overall unemployment rose to 7.75 percent from 6.86 percent in October, as rural unemployment rose to 7.91 percent in October from 6.06 percent in the previous month.

Meanwhile, as the positive base effects fade, growth in factory output slowed to 3.1% in September, from 12% y-o-y in August, leading to a slump in manufacturing, which is a real test.

While the vast majority of the organized corporate sector is functioning very well, one is not sure about the state of the rest of the economy, as discussed by supply constraints – reflected in strong tax collection.

While the demand for Indian services abroad remains weak, international demand for Indian-made products has increased significantly.

Meanwhile, gold imports increased during the festive season

The good news is that exports are on a roll; Commodity exports grew to $ 35.65 billion for the 11th consecutive month, up 43% in October and 36% from October 2019. In addition, non-oil, gems, and jewelry accounted for significant imports in September and October.

 Follow and connect with us on Facebook, LinkedIn & Twitter

LEAVE A REPLY

Please enter your comment!
Please enter your name here