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His numbers are a bit on the high side (I'd probably spend that much for a meal in the food courts at some SEZ), but the basic point is valid: I believe we stil
by copper 16y ago
His numbers are a bit on the high side (I'd probably spend that much for a meal in the food courts at some SEZ), but the basic point is valid: I believe we still see a >10% inflation rate here. For basic food commodities, the rate may be even higher.
- thomas11 16y agoThe Times of India reported food inflation last week to be at 15%. That's clearly not sustainable as worker's wages rise significantly slower.
- copper 16y agoThe IMF predictions are pretty amusing[1] too, if you like that kind of thing. [1]: http://www.tradingeconomics.com/india/inflation-average-imf-data.html http://www.tradingeconomics.com/india/inflation-average-imf-...
- eitally 16y agoNot in the IT sector. For the last several years we've seen 20-30% salary increases annually. I would argue it's more due to market conditions and the hiring practices of the big consultancies than inflation, but probably a third to half of that is an inflationary response.
- thomas11 16y agoSure, but the vast majority of Indians are not in the IT sector. These salary increases in IT are great for engineers, but they also work against India as an offshoring destination because of the rising costs.
- eitally 16y agoYes, exactly. It will be interesting to see what happens in the next 3-5yrs if salary inflation doesn't slow down or reverse and external investment is similarly reduced.
- silverlake 16y agoThe Bank of India is raising rates to combat inflation, though they have been slow to adjust. Also, commodity prices are rising all over the world. Food is more expensive everywhere.
- copper 16y agoAgreed. RBI's large response time is a good thing: it was one of the factors that allowed some insulation from the '08 crisis. It's not so much fun when it comes to deposit rates though :)