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Strong demand powers Indian economy past record inflation, for now

The activity backed by stronger new orders was accompanied by a bump in output prices as producers started passing on high raw material costs to consumers

India’s government and its central bank acted in tandem this month to counter price pressures, with steps such as tax cuts and a surprise increase in borrowing costs. (Photo: Bloomberg)
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India’s government and its central bank acted in tandem this month to counter price pressures, with steps such as tax cuts and a surprise increase in borrowing costs. (Photo: Bloomberg)

Vrishti Beniwal | Bloomberg
India’s economy maintained its momentum in April as a wider reopening from the pandemic kept rising prices from depressing demand for the time being.

Activity in the services sector as well as factories gained last month, while the three-month weighted averages of monthly changes in indicators from exports to credit demand suggested enduring strength. That helped keep the needle on a dial measuring so-called ‘Animal Spirits’ steady at 5 for the 10th straight month.

While April marked India’s early steps toward living with the virus, including the first full-month of commercial international flights after two years, risks loom

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First Published: May 27 2022 | 8:48 AM IST

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