Will inflation sustain higher for longer?

The last several quarters have seen the RBI maintain an 'accommodative' monetary-policy stance, with inflation forecasts that remain within the mandated band - even as realised inflation and consumer expectations have risen considerably, and remain at elevated levels. India is not the only country witnessing inflation. After years of low or negligible inflation, developed markets are feeling the heat of rising prices, though economists continue to forecast a cooling-off as prices stabilise (see charts 'RBI household inflation expectations' and 'Strong global inflation now but receding next year').

This article was originally published on December 10, 2021.