Indian economy: Downgrade in GDP figures expected in 2022, but lower debt-to-GDP ratio in real terms needed, says Mythili Bhusnurmath.

Indian economy: Downgrade in GDP figures expected in 2022, but lower debt-to-GDP ratio in real terms needed, says Mythili Bhusnurmath.

India’s GDP: Indian Economic Framework: GDP numbers set to fall, but real reduction in debt-to-GDP ratio needed, says Mythili Bhusnurmath. Although a decline in GDP is expected, Mythili Bhusnurmath believes that an effective reduction in the debt-to-GDP ratio is desirable. June 10, 2022, 12:47 PM IST | And now ”

GDP figures are expected to decline. However, in real terms, we need to reduce the debt-to-GDP ratio,” says ET NOW editor Mythili Bhusnurmath, as Fitch Scores improves India’s outlook to secure it. Click on the hyperlink shown in bold to access your saved stories.

This is the ninth consecutive season that I have won! Never mind that growth has been steadily picking up since the repo rate was initially cut to 4% in May 2020. Inflation, on the other hand, has been rising. Inflation in the previous financial year averaged 6.2%, which was above the RBI’s target zone of 4-6%. It has been towards the bottom of the range only once in the 22 months since January 2020, in January 2021, when it was above 6% for 12 of the 22 months.

The most recent figures (October 2021) show industrial price inflation at 12.54%, with retail price inflation at a more manageable 4.5%. However, this is mainly responsible for the exceptionally high load, i.e. the inflationary solid in October 2020, which is expected to fade by December this year.

When you combine rising commodity prices, especially oil prices, with rising global inflation, the signs are grim. More importantly, policymakers around the world are learning that accommodative monetary policy has reached its limits and that further easing is like pulling a string.

The trade-off between growth and inflation is not new. It is one of the most controversial topics in contemporary economics. Any decision to emphasize one over the other must be based on sound theoretical/empirical models and, more importantly, sound judgment. This crucial element of assessment seems to be lacking in the Indian context.

Consider: “The chances of economic growth are gradually increasing,” admits the governor, “even for contact-intensive sectors that have been heavily damaged by the pandemic.” “Conditions for a resurgence of investors are also improving. For the third time in a month, production of capital goods remained above pre-pandemic levels in September, while imports of capital goods rose by double digits for the eighth month of October.

“The recovery of the Indian economy is multiplying… All components of GDP recorded year-on-year growth, with the trade balance firmly above pre-covid levels,” according to the report.

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However, he believes that the recovery is still insufficient, stressing “the essential importance of the continuation of structural reforms for a sustainable and widespread recovery”. “..What does it mean to be sustainable? What does it mean to be wide? On these concerns, the MPC resolution is silent. For the fifth consecutive quarter, growth is positive. In terms of a broad base, all industries have seen growth for two consecutive quarters.

Inflation has always been an important indicator of a country’s economic progress. We have also shown that Indian politicians have used the question of pricing to increase their vote banks throughout the last decade. Before the 2015 Union budget, it was not pricing but deflation that worried economists and analysts.

According to a study published by The Economic Times (ET), the wholesale price indices (WPI) fell to -0.39% in January, compared to 0.11% in December due to a drop in oil prices. essence. On the other hand, analysts and economists say it is not a good predictor for the Indian economy as a whole.

According to a report, gasoline and electricity inflation fell to (-) 10.69% in January from (-) 7.8% in December 2014. The inflation rate for major items fell to (-) 10.69% in January. increased to 3.27% in January from 2.17% in December. Food inflation increased to 8% in December 2014 from 5.20% in December 2014.

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“Global deflation hurts us too. The pricing power of manufacturers is eroding. We already have evidence that there is excess capacity. The pricing power of companies is reduced, so there would be less desire to create goods,” said ET Now editor Mythili Bhusnurmath.

“If manufacturing prices are that low, they will try to reflect in the CPI and drive it down,” Sanjay Shah of HSBC Global Wealth Management India told the Economic Times. “This could bring the inflation figures to lower ranks than the RBI is considering.”

Arun Singh, an economist at Dun & Bradstreet, expressed his fear of deflation to Economictimes.com, saying, “Once oil prices rise, India will be vulnerable again.” Negative inflation is due to international reasons rather than national reasons. It is a worrying omen. (Image courtesy of pbs.twimg.com)

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“This is the new government’s first budget,” MK Anand, Managing Director and CEO of Times Television Network, said, “and ET NOW will bring together leading experts in various fields in India, think tanks, investors from around the world and the best publicity minds of the country to decipher and analyze the 2014 Union Budget.” Through our programs, we hope to reach all Indians, from businessmen to commoners, by providing in-depth coverage of the budget process and budget day .

“With all eyes on a big budget from Narendra Modi, ET NOW has put together some sort of advanced system suite that will give audiences a holistic view of the Indian economy and the influence it would after the announcement of the 2014 Union Budget.” said Jatin Bhatt, CMO – TIMES NOW, ET NOW and ZoOm. Union Budget is an opportunity for a network like ours to deliver the most exciting programming and the most diverse that builds trust among our current viewers while attracting new viewers.

Julio V. Miller