II. Recent Macroeconomic Trends: India in a Global Perspective. 4

The macroeconomic policy response in India after the North Atlantic financial crisis (NAFC) was rapid. The overshooting of the stimulus and its gradual withdrawal sowed seeds for inflationary and BoP pressures and growth slowdown, then exacerbated by domestic policy bottlenecks and volatility in int...

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Bibliographic Details
Main Authors: Muneesh Kapur, Rakesh Mohan, Prepared Muneesh Kapur
Other Authors: The Pennsylvania State University CiteSeerX Archives
Format: Text
Language:English
Published: 2014
Subjects:
Current Account
Capital Flows
Exchange Rate
Exports
Fiscal Policy
Gold
Growth
India
North Atlantic
Online Access:http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.453.1702
http://www.imf.org/external/pubs/ft/wp/2014/wp1468.pdf
Description
Summary:The macroeconomic policy response in India after the North Atlantic financial crisis (NAFC) was rapid. The overshooting of the stimulus and its gradual withdrawal sowed seeds for inflationary and BoP pressures and growth slowdown, then exacerbated by domestic policy bottlenecks and volatility in international financial markets during mid-2013. Appropriate domestic oil prices and fiscal consolidation will contribute to the recovery of private sector investment. Fiscal consolidation would also facilitate a reduction in inflation, which would moderate gold imports and favorably impact real exchange rate and current account deficit.

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