The raising international food and oil prices are posing greater risk to growth of Indian Economy in comparison to other Asian economies like China, Indonesia or Malaysia. According to Asian Development Bank (ADB) estimate, the inflationary pressure caused by increase in global oil and food prices will take off over three quarters of a percentage point from India’s growth and another 1.25% points in 2012. The ADB estimates that Indian growth will hit the highest in 2012 in comparison to other major Asian economies included in the study.
The ADB had used the Oxford Economics Global Model to study the impact of increased food and oil prices, according to which, from August 2010, the crude oil prices have increased by 45% and food prices by 10 to 35% in various countries. The model generates projections of key economic variables based on the assumption that monetary authorities in the region will adopt a gradual tightening stance in the next years as recovery takes firm hold. The ADB’s key hypothesis is that the international food and crude oil prices raised by 30% and moderately falls in 2012. According to ADB estimates, the expected oil and food price increase this year is likely to hammer Indian economy more vis-à-vis China for 2011 and 2012. Other indicators also indicate, inflation is affecting the Indian growth story.
Indian economy registered 7.8% growth rate in the 4th quarter of the FY11. This was the slowest in the last five quarters. However, for the 2010-11, the Indian economic grew by 8.5%, which was marginally lower than the government’s forecast of 8.6%. According to Financial service firm Moody, the Indian economy’s growth outlook over the next few years remains strong and the economy is likely to grow by 8.5 to 9.5% annually despite the slowdown in last quarter of FY 11. Financial firm also see inflation as biggest challenge for India’s growth. As per Moody’s report, RBI’s stand on controlling inflation should also consider maintaining the balance between growth and inflation, though firm see this task challenging for the government and central bank.
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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