The Reserve Bank of India is watching for signs of any slowdown in domestic demand as it seeks to tame “inflation drivers” that are “very much in play,” Deputy Governor Subir Gokarn said yesterday. The moderation, “we anticipate, will happen at some point,” Gokarn told reporters at a banking conference in Mumbai. “The question is whether what’s happening globally is going to impact commodity prices significantly or not. Ultimately, that is going to determine how domestic inflation plays out.” Inflation in India has stayed above 9 percent since the start of December, eroding spending power. While the risk of a global slowdown prompted nations from South Korea to Indonesia to keep interest rates unchanged this month, Reserve Bank Governor Duvvuri Subbarao said Aug. 12 it’s “too early to say” whether India’s policy stance to raise borrowing costs will be changed. India’s economy has expanded at an average pace of 8.6 percent since 2006, compared with China’s 9.8 percent during the period, data compiled by Bloomberg show. Central bank policy makers in India expect India’s growth to slow to 8 percent in the year ending March 31, from an estimated 8.5 percent in the previous 12 months.
Bloomberg
No comments:
Post a Comment