Inflation growing is a concern for economy

by khalid on 08/09/2009 · 0 comments

inflation

“We believe that inflation is becoming a concern sooner than we’d expected earlier and we have to balance the need for growth and price stability,” RBI Head Subbarao said.

Special Drawing Rights — the International Monetary Fund’s internal unit of account — do not fully meet the criteria for being a reserve currency and he did not expect it to replace the dollar.

“Inflation in India is a more urgent concern than in the other parts of the world. We know that there is risk to premature withdrawal or exit from the expansionary policy and there is a risk to delaying it too much … Our current monetary and fiscal stance is not the steady state. We have to unwind.”

India’s Planning Commission, which advises the government on key policy issues, forecast Asia’s third largest economy to expand by 6.3 percent for 2009/10. The economy grew 6.7 percent in 2008/09, slower than the 9 percent or more growth clocked in the previous three years.

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