by Edward Hugh: BarcelonaIndian inflation fell back again in the last week of October, as energy and commodity prices continued to fall, and the impact of the global financial turmoil and credit crunch ricocheted its way across one country after another. The IMF last week forecast annual growth for India of 6.3% in 2008 while India's manufacturing expansion, which continued to weaken, still held out against the global trend, according to the latest JPMorgan global manufacturing PMI.So, as we enter November, and a number of Indian indicators start to improve, it is certainly worth asking ourselves, has India turned the corner? Will India lead the emerging markets charge during the next global expansion?I am not, I am sure, alone in feeling that this is a distinct possibility, and, indeed, a similar view was expressed only last week by Sharmila Whelan, senior economist at CLSA ...

Indian inflation fell back again in the last week of October, as energy and commodity prices continued to fall, and the impact of the global financial turmoil and credit crunch ricocheted its way across one country after another. The IMF last week forecast annual growth for India of 6.3% in 2008 while India’s manufacturing expansion, which continued to weaken, still held out against the global trend, according to the latest JPMorgan global manufacturing PMI.

So, as we enter November, and a number of Indian indicators start to improve, it is certainly worth asking ourselves, has India turned the corner? Will India lead the emerging markets charge during the next global expansion?

I am not, I am sure, alone in feeling that this is a distinct possibility, and, indeed, a similar view was expressed only last week by Sharmila Whelan, senior economist at CLSA Asia-Pacific Markets.

“We do expect the Indian business cycle to

...

Indian inflation slowed back again in the last week of October, as the impact of the global financial turmoil and credit crunch continued to ricochet from one country after another. The IMF forecast annual growth for India of 6.3% in 2008 while India manufacturing expansion, while continuing to weaken, holds out against the trend. As we enter November, and a number of indicators start to improve it is certainly worth asking ourselves, has India turned the corner? Will India lead the emerging markets charge during the next global expansion?I am not, I am sure, alone in feeling this, and a similar view was expressed during the last week by Sharmila Whelan, senior economist at CLSA Asia-Pacific Markets.``We do expect the Indian business cycle to be the first to bottom in Asia. And, it should, in theory, be first to emerge,'' Sharmila Whelan, senior economist at CLSA, ...

India’s central bank yesterday (Monday) unexpectedly lowered its base lending rate for the first time since 2004 – a move that signals that India Reserve Bank Governor Duvvuri Subbarao sees weaker growth and the credit crisis as bigger threats than inflation in Asia’s third-largest economy. The Reserve Bank of India cut its overnight lending rate from 9% to 8%, according to a government statement issued in Mumbai yesterday. The “surprise move” that came days before a regularly scheduled meeting of its policy board came after India’s central bank reduced the cash reserve ratio by 2.5 percentage points to 6.5% – retroactive to Oct. 11, Bloomberg News and MarketWatch.com both reported. The so-called “repurchase rate” is the discount rate at which India’s central bank lends money to commercial banks to infuse liquidity into the market. India’s rupee ...

Inflation is no loger the greatest threat to the short term health of the Indian economy. The global credit crunch has now taken over poll position on the list of worries which are likely to determine the evolution of policy over at the Reserve Bank of India. India's inflation continues to slow and hit a four-month low at the start of October, giving the central bank room to keep injecting cash into the financial system without fanning prices.Wholesale prices rose 11.44 percent in the week to Oct. 4 from a year earlier after gaining 11.8 percent in the previous week, according to data from the commerce ministry last week.

Weaker price gains and a shortage of money in the banking system have allowed the central bank to shift its focus from fighting inflation to stimulating an already slowing economy.

...

Inflation is no loger the greatest threat to the short term health of the Indian economy. The global credit crunch has now taken over poll position on the list of worries which are likely to determine the evolution of policy over at the Reserve Bank of India. India's inflation continues to slow and hit a four-month low at the start of October, giving the central bank room to keep injecting cash into the financial system without fanning prices.Wholesale prices rose 11.44 percent in the week to Oct. 4 from a year earlier after gaining 11.8 percent in the previous week, according to data from the commerce ministry last week.

Weaker price gains and a shortage of money in the banking system have allowed the central bank to shift its focus from fighting inflation to stimulating an already slowing economy.

...

India's inflation shot up again at the start of August and hit a 16-year high of 12.44% in the week to Ausust 2, following a 12.01% increase in the previous week, according to data from the Commerce Ministry. Concerns have also been raised that inflation may accelerate further after the government approved sizeable wage increases (in the region of 21%) for civil servants.The Indian cabinet yesterday approved an average 21 per cent pay rise for 5m federal employees and military personnel. This is effectively the first revision of government salary scales for 12 years. P. Chidambaram, finance minister, said on Thursday that the civil servants’ pay rise, to be backdated to January 1 2006, would cost Indian taxpayers $3.6bn (€2.4bn, £1.9bn) this fiscal year, including part of the arrears from 2006. Separately, Indian Railways will have to pay $1.5bn to its ...

by Edward Hugh: BarcelonaIndia's inflation accelerated to the fastest pace in more than 13 years at the start of July, putting pressure on the central bank to continue raising interest rates following the two increases made last month. Wholesale prices rose 11.91 percent in the week to July 5, after gaining 11.89 percent in the previous week, according to the commerce ministry in New Delhi on Friday.It now seems very likely indeed that the Reserve Bank of India (RBI) will continue to tighten policy, since one of the major risks facing India now is that inflation becomes entrenched, and to avoid that eventuality the RBI may well need to implement a further significant policy tightening, and this of course will have implications for an Indian economy where growth is already slowing. However, with inflation at nearly 12% ...

India's inflation accelerated to the fastest pace in more than 13 years at the start of July, putting pressure on the central bank to continue raising interest rates following the two increases made last month. Wholesale prices rose 11.91 percent in the week to July 5, after gaining 11.89 percent in the previous week, according to the commerce ministry in New Delhi on Friday.It now seems very likely indeed that the Reserve Bank of India (RBI) will continue to tighten policy, since one of the major risks facing India now is that inflation becomes entrenched, and to avoid that eventuality the RBI may well need to implement a further significant policy tightening, and this of course will have implications for an Indian economy where growth is already slowing. However, with inflation at nearly 12% and the repurchase rate at 8.5% ...

India's inflation accelerated to a 13-year high after record crude oil costs forced the government to raise retail fuel prices. Stocks and bonds fell on concern the central bank will have to raise interest rates again. Wholesale prices in India were up by 11.05 percent in the week to June 7, after an 8.75 percent increase in the previous week, according to an Indian government statement in New Delhi today. Obviously this sudden surge is creating pressures all over the place to do something. Finance Secretary D. Subbarao told reporters yesterday that "The first line of defense is monetary policy action", meaning that the Reserve Bank of India is about to take further anti inflation steps. Reserve Bank of India Governor Yaga Venugopal Reddy met Prime Minister Manmohan Singh and Finance Minister Palaniappan Chidambaram later in the day to discuss inflation and ...