Sharp decline in inflation means India is under SEVERE recession: Be and Make

As all expected, inflation came down sharply. Most of the investors feel that it is the positive news for the market but right now don’t come to conclusion that we are out of wounds.

Cooling off inflation and policy maker’s rates cuts are very necessary results of the RECESSION.

Lower inflation is the one of the good results of the RECESSION. In china, now there is 4% inflation and this sharp fall was due to the severe recession in china.
After sharp decline in inflation their markets started collapsing (due to they believed that they too caught by the CRISIS).

In India too, as most of us expected inflation is to cool off further.

Now, it is a clear indication that our economy is too affected by the GLOBAL FINANCIAL CRISIS.

For short term it is not positive news, it’s depended upon the government of India to come with some sovereign fund / stimulus package / bailout package (In my view, India unable to do this). Of course for long term, we will have good macro picture by these lower inflation/interest rates.

Due to this sudden decline of inflation, RBI has room to cut the interest rates (we can expect it in the next week) and government too prefer to cut the FUEL prices due to they are ready face the elections in some states.

So, I conclude this issue by saying that “we are not out of wounds” and also severity of this FINANCIAL CRISIS is begin in INDIA.

WITH THANKS
Be and make