The sudden flip of Indian economy trackers

I have been noticing recently that many economists/analysts have suddenly flipped their arguments. Just till April Monetary Policy 2008 many said RBI should cut interest rates as economy is slowing and inflation is moderating. Another group said the only way RBI can manage inflation is by letting rupee appreciate.

And now, same people are backing RBI’s recent interest rate moves to manage inflation and say growth can take a backseat.  Though, they keep stressing on the role of exchange rate.

They might say times have changed but I don’t think they have changed as much. And anyways economists look at forecasts and they suggested inflation is expected to go up. The prices of commodities and oil have been increasing for a while and they had to show in the inflation numbers. The few numbers that showed moderation in inflation was basically a statistical exercise and the index was never really declining.

As, far as moderating growth is concerned it was only the industrial sector. But it is well known that the IIP index is due for renovation as it does not reflect the reality. And then looking at housing prices and demand for various consumption items increasing (as per media coverage) , it was a case for high growth, high demand  and high inflation.

And then this media hype and coverage over possible slowdown is more worrisome than the actual numbers. I understand the concern over inflation but growth? Even if we grow at 7.5%-8% given world economic conditions, it is very impressive.  


I was thinking about how can we limit all this flipping. A useful way could be to show on the channels what the person said previously. So, the person will be more conscious of his/her views. Right now it is just too random. I am not saying views shouldn’t change, but by showing their previous comments, they would then also explain the reasons.

This is already happening albeit in another way. You have various stock analysts who are supposed to disclose whether they have any of the stocks they are commenting on. This leads to some clarity and we know (hopefully) that they are not advising the stocks they own.

In a simialr manner, we can get more clarity on the recent flippings.



2 Responses to “The sudden flip of Indian economy trackers”

  1. Varun Says:

    Given the plethora of news channels that we have these days, more and more air time is being devoted to these so-called experts – experts who keep changing their stances as rapidly as the change in the stock market direction! Nice to see someone raising such an obvious – but an often uncommented upon – point!

  2. Remmrit Bookmarking Says:

    Trackers Bookmarks… user has just tagged your post as trackers!…

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