Monday, March 22, 2010

Subbarao Warns of ‘Hard Landing’ as Goldman Expects Rate Rises

Bloomberg reports

By Kartik Goyal and Anoop Agarwal

March 23 (Bloomberg) -- Reserve Bank Governor Duvvuri Subbarao said India risks a “hard landing” if inflation isn’t reined in as Goldman Sachs Group Inc. and Morgan Stanley said last week’s interest-rate rise isn’t sufficient to curb prices.

“If we don’t tighten now and take action, the adjustment that we will have to make later on will be strong and we might indeed have a hard landing,” Subbarao told reporters in Bangalore yesterday. “Even if there’s a short-term trade-off between growth and inflation, in the medium term it is important that inflation is kept low in order to sustain growth.”

8 comments:

Anonymous said...

RBI Governor better start raising rates fast. Inflation is getting really out of control.

I think they may have to raise like 50 basis points every 2 months all of 2010. They have no choice.

That means around 2.5-3% rate increases. Which means a definite hard landing. RE has to go down by 50% and the Sensex back to 10K. rate increases will do the trick.

I hope Finance Ministry doesn't meddle too much with it to save their votes and friends.

Venkatesh Babu K R said...

Petrol price going up again ... what is the government doing???

Anonymous said...

Higher petrol prices means more inflation. It means more rate increases. Finally, a very hard landing.

Anonymous said...

Govt. is already subsidizing petrol and kerosene etc. to a great extent. Govt. can't keep on subsidizing it further due to increase in deficits.

Anonymous said...

unreal realty!!

Anonymous said...

World stocks hit by Greek debt, India rate hike.

19-MAR-2010 : 7 Banks closed in one day in US.

On an average 12 banks are getting closed per month.

Siemens lays off 4200 IT employees.

Religare Cap lays off 17 execs from sales, research teams.

Job insecurity increasing.

RE players, speculators, investors. Still feeling bullish ? Still, in the state of denial ?

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