Economic Survey: What do Economists say about it?
Indranil Sengupta, Chief Economist at Kotak Institutional Equities says that the government typically has growth as its prime objective, whereas the Central Bank has inflation management price stability as its primary objective.
He says, "It is on expected lines; the growth story is paramount for the policy to maintain and my sense is that if you look at all the leading indicators in the economy they all seem robust. So I do not think that growth is a concern at this stage. Inflation is a concern because a lot of inflation is been driven by supply shortage as the survey itself points out."
He adds that taming inflation will mean being patient with the causes of inflation because as the survey points out, this is not something which will go away in a hurry. Also tightening monetary policy beyond a level will hurt growth, he says.
Subir Gokaran, Chief Economist at Crisil says, "The survey is making an admission, I think it’s being very realistic and blunt, but it has made an admission that its difficult to control the kind of inflation we are seeing, as it is driven by food prices in particular, which should be controlled in the short-run. So it is a challenge from a medium-term perspective to keep inflation within check. I think one should not expect an immediate relief or solution for food-driven inflation that we are seeing today. I appreciate the candor that the survey is expressing on this issue."
Chief Economist at Standard Chartered Bank, Sucheta Mehta says that the price of imported oil which is lower YoY, is a positive for the economy and inflation.
She says, "I think that on the current account balance front, the key positive at this point in time is that the price of imported oil is lower YoY. This helps moderate impact of imported inflation on firstly, the Economy and secondly the impact of oil on the current account balance. So that is one thing that is positive from the global environment perspective. I think that trade liberalization has been an ongoing theme. Perhaps, further reduction in customs duty could be one thing that could be coming through in the Budget."
He says, "It is on expected lines; the growth story is paramount for the policy to maintain and my sense is that if you look at all the leading indicators in the economy they all seem robust. So I do not think that growth is a concern at this stage. Inflation is a concern because a lot of inflation is been driven by supply shortage as the survey itself points out."
He adds that taming inflation will mean being patient with the causes of inflation because as the survey points out, this is not something which will go away in a hurry. Also tightening monetary policy beyond a level will hurt growth, he says.
Subir Gokaran, Chief Economist at Crisil says, "The survey is making an admission, I think it’s being very realistic and blunt, but it has made an admission that its difficult to control the kind of inflation we are seeing, as it is driven by food prices in particular, which should be controlled in the short-run. So it is a challenge from a medium-term perspective to keep inflation within check. I think one should not expect an immediate relief or solution for food-driven inflation that we are seeing today. I appreciate the candor that the survey is expressing on this issue."
Chief Economist at Standard Chartered Bank, Sucheta Mehta says that the price of imported oil which is lower YoY, is a positive for the economy and inflation.
She says, "I think that on the current account balance front, the key positive at this point in time is that the price of imported oil is lower YoY. This helps moderate impact of imported inflation on firstly, the Economy and secondly the impact of oil on the current account balance. So that is one thing that is positive from the global environment perspective. I think that trade liberalization has been an ongoing theme. Perhaps, further reduction in customs duty could be one thing that could be coming through in the Budget."
No comments:
Post a Comment