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Sunday, December 15, 2013

India suffers stagflationary trends.

Indian CPI rose 11.2% in November and exceeded consensus of 10%, while industrial production fell 1.8% in October vs expectations of -1.2%. The trends exacerbate the dilemma for the Reserve Bank of India, which is due to meet next week, about how to bring down inflation against a background of weak growth. The data "paint a stagflationary picture of the economy where despite weaker growth, inflation remains elevated due to supply-shocks," says Nomura economist Sonal Varma.

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