Behind the curve

.....While RBI is, at a macro level, right when it talks of demand-supply imbalances, the larger point is that the slowing of the Indian economy over so many quarters made it obvious it was just a matter of time before WPI began following suit. Indeed, with services GDP also slowing, even CPI will start slowing at a faster pace in the months ahead. Even when RBI’s policy came out on May 3, it was not quite clear what the central bank’s concerns were since, apart from depressed local conditions, there was little in the global economy to suggest any sudden reversal of commodity prices either. Hopefully, RBI will get enough time to study inflation trends and ...............

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