India's industrial output growth slumped to its lowest

[lem34]

You dont understand. The slump in growth is an indirect impact of rate hike by RBI. RBI periodically hikes rate in an effort to curb inflation.

Mounting concern over growth in India and globally is increasing pressure on the Reserve Bank of India to put its 18-month-long campaign to raise interest rates on hold Friday.

and the net effect is?

 

[IndoCarib]

and the net effect is?

Rate hike could impact economic growth in the short-term. RBI is unlikely to continue hiking the rate as they were awaiting this slump in growth. With no further rate hike, growth rate may bounce back but inflation will rise unabated

 

[lem34]

Rate hike could impact economic growth in the short-term. RBI is unlikely to continue hiking the rate as they were awaiting this slump in growth. With no further rate hike, growth rate may bounce back but inflation will rise unabated

Yaar economy is very difficult to speculate there are so many variables and thats why so many experts get predictions wrong. But overall realtivly compared to whats going on in the world indias doing ok

 

[nForce]

and the net effect is?

The process is like this....

let us assume there is too much liquidity in the market.The condition is bound to fuel inflation.Inflation will have lots adverse effects.So it has to be controlled.So the extra cash floating in the market has to be reduced.Now there are many theoretical ways to control it.But this one is the most effective,which is to hike the rate of interest.This is a standard procedure for central banking institutions all over the World.
You have to understand that irrespective of the country,bank is the chief source of money the market.Influx of money occurs via loans from the bank,be it for housing,industry etc etc.So,if the rate of interest is hiked by the Central banking institution,then a reverse flow of money from market to bank will take place,liquidity will go down and the market will be saved from inflation.

Henceforth,the net effect is,lowering of inflation.

 

[Chinese-Dragon]

Rate hike could impact economic growth in the short-term. RBI is unlikely to continue hiking the rate as they were awaiting this slump in growth. With no further rate hike, growth rate may bounce back but inflation will rise unabated

India's inflation is rising anyway, despite the falling growth rate.

BBC News - Indian inflation rises to yearly high of 9.78%

Latest inflation figures from India are 9.78%.

Growth is falling, but inflation is rising... something doesn't seem right.

 

[IndoCarib]

India's inflation is rising anyway, despite the falling growth rate.

BBC News - Indian inflation rises to yearly high of 9.78%

Latest inflation figures from India are 9.78%.

Growth is falling, but inflation is rising... something doesn't seem right.

Without frequent rate hikes inflation would have sky rocketed. RBI did a good job in containing the inflation to some extent. In this process, moderation in growth was expected. We dont expect any more rate hikes.