Along with India, consumers around the world are troubled by inflation. The high crude oil prices due to the war between Russia and Ukraine have made it worse. On the one hand, inflation is rising rapidly, forcing consumers to cut spending. On the other hand, low wage growth relative to inflation has added to the crisis. In view of this, global financial institutions are reducing the growth estimates of other economies including India. This has come to the fore in a report by Bloomberg and Morgan Stanley.
Americans suffering from inflation: According to official data from the US, the inflation rate there reached 7.9 percent in February this year. This is the highest figure since 1982. Experts say that further increase in inflation rate in America can be seen. In fact, the inflation report for February released by the US Labor Department does not include the recent rise in oil and gas prices that followed Russia’s invasion of Ukraine on February 24. Average gas prices have seen a sharp jump since Russia’s attack.
Lowest salary increase in 20 years: According to the report, the average wage increase for Americans at the end of last year was 4.5 percent, the lowest wage increase in the past 20 years. Whereas inflation is almost two times higher than this. The cost of housing, which accounts for about a third of the government’s consumer price index, has risen sharply amid a drop in wage growth, according to the data. This frustrates the consumer.
Relief Monday: Petrol 82.96 and Diesel Rs 77.11 a liter
Fear of inflation based slowdown in India
“We are of the view that current geopolitical tensions are exacerbating external risks and are also creating potential for an inflation-induced slowdown in the economy,” brokerage firm Morgan Stanley said in a statement. Inflation-induced slowdown refers to a situation when production or growth stagnates and inflation remains high. Experts say that this situation is extremely dangerous. Retail inflation in India is expected to be above 6 per cent in the current financial year, which is the Reserve Bank’s projected ceiling.
This Penny Crypto Token Jumped Over 1400 Percent In 24 Hours, Investors Are Rich!
economic growth slowing
Asia’s third-largest economy is expected to grow at 8.9 per cent in the current fiscal, according to the latest data from the Indian government. On the other hand, Morgan Stanley has reduced India’s GDP growth forecast for the new financial year to 7.9 percent. Apart from this, giants including the World Bank, International Monetary Fund have reduced the forecast of the global economy.