Could This Be A Stagflation?

Even if you find macroeconomics daunting and a bit boring, there’s one set of numbers that’s sure to earn your undivided attention every once in a while: retail inflation. This is one such time when that phrase stalks us again, like a seasonal curse—except that it’s much worse this time. The knock-on effect of the health crisis is already all-pervasive: the government is struggling to put the economy back on track and help people retain jobs. No mean challenge, therefore, for it to navigate the complex factors that get consumer prices to soar. And the overall picture is gloomy enough for some experts to toss that other dreaded word into the frame: stagflation. Why we are talking about it is, the Consumer Price Index (CPI) has been playing well above the Reserve Bank of India’s (RBI) upper margin of 6 per cent. It was marginally better in August, when retail...