Indias current gdp and inflation relationship

GDP growth rate: India’s GDP growth rises to % in December quarter

indias current gdp and inflation relationship

Graphic: GDP Annual Percent Change, and , by country. Ongoing shifts in U.S. monetary policy are causing India's rupee to depreciate against the dollar. the rupee's value in relation to trading partner currencies — is down through trimming the current account deficit and keeping inflation in. India's GDP grew % in the third quarter, surpassing expectations and “The current growth rate reflects that reforms by the government. New Delhi: India's economic growth momentum is likely to pick up further in the April-June period and the country is expected to clock GDP.

Click here for enlarge The important question is: Inwhich was a drought year for India, Wholesale Price Index headline inflation was low at around 3. Remember the world economy was just recovering from the wreckage of the dot-com bubble. Inwhen the world economy was recovering from the Lehman crisis in the US and El Nino conditions were prevailing, headline inflation was low at 3. Even food inflation was very low inalthough it was high in On the other hand, inflation rose very sharply in because of government stimulus and administered minimum support prices that increased the prices of food grains.

Historical data indicate that there is no direct correlation between El Nino, inflation and GDP growth. Moreover, there are several mitigating factors this year, according to a Citi Research note dated 24 March—water reservoir levels are comfortable and excess foodgrain stocks could offset the inflationary impact from El-Nino to some extent.

Also, the contribution of summer crops kharif in agriculture production has been declining while the contribution of winter crops rabi has been on a rise.

India Economic Outlook

The sowing of the rabi crop is not directly impacted by less rainfall. However, the problem this time is that the industrial economy is in a recession and investment demand is very low. In his study, he concluded on the basis of monthly data that we cannot establish a strong relationship between Rate of inflation and foreign institutional investors. He also focused his research on relationship between foreign institutional investor and exchange rate in India.

• Inflation rate in India | Statista

To achieve the objective, he has been collected the data from secondary sources and he used two statistical tools these are correlation and regression. He finds out in his study that there is a positive and high correlation between economic growth and FDI inflow in India.

indias current gdp and inflation relationship

The association is statically significant whereas the associate between FII and economic growth is statically insignificant. Gurmeet Singh [ 3 ] has conducted a study to investigate the cause and effect relationship between foreign institutional investors and exchange rate in India.

He tries to focus on interrelationship between foreign institutional investors and exchange rate. For this he used granger causality test. He revealed in his paper that there is a long run relationship exists between them.

In our nation, exchange rate affected by Foreign Institutional Investors. There is a positive relation in both. This paper revealed that there are no any major changes in Indian capital market due to FII. In their study, they examine that the market of developing countries like India weather they have also being dominated by Institutional Investors or not. However, there is limit for flow of FII in our nation. They find out that there is Uni-directional causality between return and Foreign Institutional Investor.

There is bi-directional causality between market capitalization and Foreign Institutional Investors. Kulwant Rai and Bhanumurthy [ 5 ] have conducted a study on determinants of foreign institutional investors FII in India. The Researchers found that FII inflows basically depends upon three main economic indicators that are stock market returns, Inflation rates both domestic and foreign ex-ante risk. In their study, they have not found any causative link in between inflow of foreign institutional investors to stock returns.

They tried to observe the effect of three major determinants of foreign institutional investor FII i.

  • Economic history of India
  • Inflation rate in India 2010-2022
  • How rising crude oil price affects India’s GDP growth, inflation, and current account deficit

The researchers have found that the FII flows of domestic country adversely affected by the relation of inflation and risk in domestic the country and return in the foreign country and vice versa.

Narayan Sethi and Uma Shankar Patnack, in their study the researchers tried to find out the impact of international capital flow that is foreign flow on economic growth of India. On the other hand, FII is negatively affecting the economic growth of India [ 67 ]. Himachalapathy conducted a study to find out the various determinants of Foreign Institutional Investment inflow in India.

The relationship between El Niño, inflation and GDP growth

FII is that fund that is registered outside the country where they are investing. He revealed FII inflows is a mixed pattern of inflows and high volatility. On the other hand, Inflation and BSE returns were insignificant determinants.

He advised to follow the favorable measures should be taken for increased FII inflows [ 89 ].

indias current gdp and inflation relationship

Objectives of the Study 1. To study the relationship between FII and various economic indicators i. In this study exploratory research has been used. Statistical Tool Used Various tools are used for different studies.

indias current gdp and inflation relationship

In this study researchers used two tools. For first objective figures and tables has been used.