Not good, more a question of how bad.

"After the most severe global recession in decades, private and official forecasters are increasingly optimistic that world output will recover strongly this year," Prof Nouriel Roubini. "In the US, the main risk is overheating." "In China and the economies closely linked to it", "high levels of debt and leverage in some parts of the Chinese private and public sectors will pose risks", and Japan's "massive public debt may eventually become unsustainable". "Among the more troubled economies to watch around the world are India, Russia, Turkey, Brazil, South Africa, many parts of Sub-Saharan Africa," Mint. "The fear was that house prices would collapse, as they reliably had done in past economic downturns," CNN. "Instead house prices soared even as the world suffered its worst slump since the Great Depression. From New Zealand to the United States, Germany, China and Peru, the same phenomenon has taken hold: home prices are skyrocketing and many buyers are panicking." Rising prices will trigger a boom in construction, which will raise prices of commodities. "Already the world's biggest consumer, China spent $150 billion on crude oil, iron ore and copper ore alone in the first four months of 2021," Economic Times (ET). "With global commodities rising to record highs, Chinese government officials are trying to temper prices and reduce some of the speculative froth that's driven markets." In India, "A spike in input cost is starting to pinch profit margins, prompting companies in some sectors to take guarded price hikes," Mint. "Manufacturers of large packaged consumer goods are deferring promotional offers to retailers and consumers while raising product prices, as they tackle an increase in  commodity costs," Hindustan Times (HT). "Increase in input costs and supply disruptions in rural economy on account of the second Covid-19 wave are preparing the grounds for surge in inflation during this fiscal, rating agency Crisil, noted in a recent report," Business Today. "Referring to government data, Crisil noted that wholesale price index (WPI)-linked inflation crossed double digit level at 10.5 percent year-on-year in April 2021 from 7.4 percent in March, for the first time since 2010." It is possible that WPI inflation could be much higher but for the strength of the rupee against the dollar which keeps a lid on the cost of imports. "We have had the largest FDI in India ($81 billion in FY21) and the FPI inflow was also continuous. In FY21, a lot of imports were down because of the lockdown. All of that is getting reflected in the rupee," said Jayesh Mehta. "But at the end, it is more about dollar weakening than rupee strengthening," ET. The government should increase spending to support economic growth, according to Prof Abhijit Banerjee, ET. "Is it possible to spend an extra 2% of GDP on this right now? Probably -- many countries have borrowed 10 times that amount, so why not?" he said. "The Union government is staring at a second straight year of revenue shortfalls", and the "Reserve Bank of India (RBI) said in its bulletin that the biggest toll of the second Covid-19 wave was in terms of a demand shock -- loss of mobility, lower discretionary spending and unemployment, besides inventory accumulation, though aggregate supply was less impacted", HT. Higher unemployment means less income tax collection and lower consumer spending means less GST collection. "The shortfall in GST compensation payable to states in the current fiscal is estimated at Rs 2.69 lakh crore (Rs 2.69 trillion), of which Rs 1.58 lakh crore would have to be borrowed this year," CNBCTV18. The government could at least lower costs by reducing taxes on fuel, instead taxes on petrol and diesel are rising inexorably. On top of this the RBI "is paying a dividend of Rs 99,122 crore (Rs 991.22 billion) to the government, double the budgetary estimates", ET. "India is the only country among eight major emerging markets that has four of the five selected macroeconomic parameters much worse than the average," wrote Prof Alok Sheel. "For these reasons India is particularly vulnerable to the external shock of a rise in US interest rates and turn in the global financial cycle." Strong dollar, weak rupee, rise in prices, fall in growth, also known a 'stagflation'. Fall in earnings , with soaring prices. Surely not 'achche din', is it?