Sporadic flights to safety are driving capital flows out of emerging markets into advanced economy assets; but the universe of negative yielding bonds is growing disconcertingly large, posing a potential threat to financial stability. Strengths and Weaknesses 2. In this hostile environment, India’s external sector has exhibited resilience and viability.
Year-to-date inflation settled at 3.7 percent, which is manageable and within the official target range of 2.0 to 4.0 percent. Our latest estimates show full-year inflation at 4.6 percent in 2022. This revised forecast already incorporates the impact of higher global non-oil prices, continued shortage in food commodities, and possible transportation fare hikes due to higher oil prices.