India better placed than many economies to avoid stagflation: RBI bulletin

India is better placed than many other countries to avoid the risks of a potential stagflation, as per an article published in the Reserve Bank of India (RBI)’s June 2022 bulletin. Domestic macroeconomic conditions have improved further in spite of formidable headwinds from external developments. The paper cited that the GDP for 2021-22 surpassed its pre-pandemic (2019-20) level by 1.5 per cent and economic activities, gauged by high-frequency indicators, are gaining strength in 2022-23. Also, India’s current yield curve indicates an improvement in its long-term growth prospects and an upturn in forecast inflation expectations. However, global economic conditions continue to deteriorate as high commodity prices and financial market volatility have led to heightened uncertainty.