Apart from the Ukraine-Russia war, high inflation and exit of easy money policy can be a risk for investors this fiscal. Can markets withstand turbulent times or is there a devil waiting in disguise?
Analysts believe top-line growth will be driven by broad-based demand
Besides the petrol, diesel and LPG prices, compounding the woes for manufacturers and consumers alike is the sharp hike in prices of natural gas starting April 1 for a period of six months
Instead of a recovery in gross margins in fiscal 2022-23 (FY23), Jefferies now builds-in 50-200 basis point (bps) YoY decline, assuming crude stays closer to $100 a barrel and palm oil at $1,500/MT
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Samajwadi Party president Akhilesh Yadav slammed the ruling BJP over the hike in domestic cooking gas price, terming it "another gift of inflation" for the people after the elections in five states.
Shaktikanta Das was also quick to add that he expects retail inflation to moderate going forward
The Reserve Bank of India (RBI) is expected to prioritise growth over inflationary fears in its April, 2022 policy meet.
Congress leader Rahul Gandhi on Saturday cautioned that inflation will rise further and urged the government to act now to protect the people of the country. Asserting that inflation is a tax on all Indians, Gandhi said record price rise had crushed the poor and the middle class even before the Russia-Ukraine war began. "It (inflation) will increase further as: - Crude > $100/barrel - Food prices expected to rise 22% - COVID disrupts Global Supply Chain," he said in a tweet. "GOI must act NOW. Protect people," the former Congress chief said. Retail inflation hit an eight-month high of 6.07 per cent in February and wholesale price-based inflation soared to 13.11 per cent on account of hardening of crude oil and non-food item prices, according to government data released on Monday. The rise in crude oil and natural gas prices after the Russian invasion of Ukraine, which began on February 24, has put pressure on the wholesale price index.
India's economy which is already reeling under inflationary pressure, now faces an ever increasing risk of stagflation.
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The country is expected to register a growth rate of 8.9 per cent in the current fiscal ending March 31
Indian retail inflation likely slipped marginally in February, thanks to lower food prices, according to economists who still warned that surging oil prices will push inflation much higher in future
Nomura pointed out that even though the outlook for banks remains positive, a prolonged conflict-like situation would be negative for global growth
International oil benchmark Brent crude, which briefly hit more than $139 a barrel in the previous session, was up about 2.6% at $126.42.
A sustained rise in oil, food prices would have adverse impacts on Asia's economies. India, Thailand and the Philippines are the biggest losers, while Indonesia would be a relative gainer, Nomura said
"Inflation pressures in India continue to emanate largely from supply side factors, and the recent print also reflects adverse base effects," Shaktikanta Das said
Retail inflation for farm workers and rural labourers rose to 5.49 per cent and 5.74 per cent, respectively in January mainly due to higher prices of certain food items