There are many speculations about the state of Indian economy presently doing the rounds, with some calling the current situation of rising inflation, slowing growth and high unemployment a stagflation. In an exclusive interview with Business Today, Madan Sabnavis, Chief Economist of the Bank of Baroda, said that we are not at all caught in a situation of stagflation and that using such a term is a misnomer.
Stagflation means negative growth in two successive quarters and high inflation. Sabnavis said that we are nowhere in the negative GDP growth region, as we had it during the lockdown, but not after that.
Stagflation is a situation in which inflation is high, unemployment is high and growth is low. Even if inflation is up to 8 per cent, it is not scary, according to him.
All the fears that people had about crude oil price going to $140 -- 150, somebody said $400 per barrel, have been put to the rest. Today, we have seen that equilibrium would be around $110. He said that he does not believe that there's going to be an increase in price.