Summaries by Dhiraj Nim

India's recent low core inflation amid robust GDP growth, previously a puzzle, is explained by a rare confluence of factors now reversing. These included strong capital formation expanding productive capacity, easing food price-driven inflation expectations, disinflation exported by China, and domestic GST reductions. However, these forces are fading. Consumption is accelerating, food inflation is lifting expectations, Chinese prices are reflating, and GST cut impacts have diminished. Input costs are rising, potentially pushing core inflation higher. Policymakers should be cautious and not misinterpret past low inflation as a broken link between growth and inflation, as an era of effortless disinflation is ending.