Nomura's Varma Sees Indian Inflation Rising Above 5%

The transcript discusses the unexpected rise in inflation due to unseasonal rains affecting vegetable prices. It predicts inflation will exceed 5% in the short term but suggests moderation in early 2018. Key concerns include oil prices, economic recovery, and food inflation. The Indian economy is described as supply-constrained, with potential growth declining due to reduced investment. However, a cyclical recovery is anticipated, with inflation risks leaning more towards the upside unless oil prices correct significantly.

What is the primary reason for the recent increase in vegetable prices?

• Government policy changes

• Increased exports

• Unseasonal rains

• Seasonal demand

Which of the following is NOT a key concern for inflation in 2018?

• Food inflation comeback

• Economic recovery's impact on core inflation

• Technological advancements

• Oil prices

What factor could lead to a downside risk in inflation according to the discussion?

• Economic slowdown

• Rise in vegetable prices

• Significant correction in oil prices

• Increase in oil prices

How has the potential growth of the Indian economy changed in the last 5-6 years?

• It has fluctuated unpredictably

• It has declined

• It has remained stable

• It has increased significantly

What is the current state of the Indian economy as described in the transcript?

• Supply constrained

• Export driven

• Technologically advanced

• Demand constrained