You’re hearing the phrase often “Inflation is rising”. The most current data from the research tank Centre for Monitoring Indian Economy shows that India’s unemployment rate declined to 6.43% in September 2022, the lowest level since August 2018, and after reaching a one-year high of 8.3% in August 2022. In the US, the Federal Reserve’s monetary policies may determine whether a recession will occur. With the looming threat of a recession looming, are people ready for what’s to come? Rizing talks to industry expert Chakri Lokapriya, who is the MD of TCG Asset Management. He opines that there is no such thing as medium-term decoupling in an economy. India is pretty active when it comes to imports and exports. If there is a recession worldwide, oil prices fall down and with strong demand, oil prices go up. He remarks that a recession would increase the fiscal deficit of India. He also brings up the point that there may not be such a thing as a real decoupling of an economy.
Chakri states that at a micro-level, the demand is still fairly strong in India and companies are not seeing a recession in India, but with the Fed and central banks being cognizant of a coming recession, corporate India is hesitant to do CapEx and expansion. The noise of the recession may be greater than reality and it is quite possible that we may be talking ourselves into a recession that is not there. Having said that, the central bank in India is aware that growth can slow, but they have their eye on growth, being proactive. He also opines that the US is not in a recession, currently, by any stretch of the imagination, with demand being strong, the US consumer base being strong, employment being strong and more and on the other hand, in Europe, the inflation seems to be more real, with some non-US currencies being down.
Coming to investments, he believes that for salaried individuals, one may be losing money in the bank in the face of inflation. In this interview, Chakri explores whether this is a real recession or a technical recession, how India reacted with COVID-19 dissipating, whether this was engineered by the US government, whether inflation in India may be an engineered number, whether we can shake off this feeling of being recession-ish, whether there’s more reaction to noise than reality, how the stock markets may be getting affected, the outlook retail investors ought to have, whether we’re talking ourselves into a recession and more.
