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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Sep 04 2013

India’s Trilemma: Targeting Growth, Inflation or Free-Falling Rupee

As anticipated by the earlier downturn in ECRI’s Indian Long Leading Index, Indian economic growth has been slowing since 2011. Recently, GDP growth has eased markedly and industrial production growth is hovering in negative territory, while consumer price inflation remains close to double-digit readings. Compounding matters is a free fall in the rupee, whose plummet to a record low has triggered a near panic in the market.

ECRI has just updated an in-depth study on the Indian economy, providing analysis on economic growth, inflation, trade and the public sector, in addition to a review of ECRI’s Indian indexes. This study reveals not only where India stands now, but also what lies ahead, by examining how much leeway cycles in growth and inflation are apt to give the Reserve Bank of India as it tries to balance growth and inflation while defending the rupee.