"Retail inflation for the month of April softened to 4.29 percent while the Index of Industrial Production (IIP) surged to over 22 percent for March mainly on account of base effect," Economic Times (ET). These figures are year-on-year, and so, difficult to judge because India was in complete lockdown in all of April 2020. However, for the whole of the financial year, "The Covid-19 pandemic shrunk India's factory output by almost 10% in 2020-21, the biggest shock to manufacturing activity since 1982-83, the earliest period for which Index of Industrial Production (IIP) is available," Hindustan Times (HT). "The Nomura India Business Resumption Index (NIBRI), which peaked at 99.3 in the week ending February 23, just 0.7 points below pre-pandemic levels of activity," "has since fallen to 64.5 in the week ending May 9". Core inflation, which strips out volatile food and fuel sectors, Investopedia, fell from 6.1% in March to 5.5% in April. Regarding inflation, "According to economists, more than the year-on-year metric, the month-on-month momentum may hold some key answers," wrote Aparna Iyer. "Here, the momentum in food inflation has increased marginally", but "the momentum in core inflation has picked up sharply to 0.61% in April from 0.17% in March". "Growth in India's dominant services sector eased to a three-month low in April," as "The Nikkei/IHS Markit Services Purchasing Managers' Index fell to 54.0 last month from 54.6 in March", yahoo!news. "Services firms noted the steepest rise in overall expenses in over nine years as global shortages of inputs and higher transport costs continued to exert upward pressure on outlays," said Polyanna De Lima. "Around 80% of world goods trade by volume is carried on ships, according to the United Nations World Conference on Trade and Development, and India provides many of their crews. More than 200,000 of an estimated 1.7 million seafarers globally are from India, according to Guy Platten, the Secretary General at the International Chamber of Shipping," CNN. "As many countries have banned flights from India, it is already impossible to move Indian workers to ports around the world and swap crews." "India is the world's largest supplier of generic drugs" and "typically produces more than 60% of all vaccines sold globally". "India is one of the garment largest exporters in the world, and the industry is struggling with severe labor shortages." "Big banks and accounting firms are scrambling to keep their online operations afloat, given how important India is as a hub or their back offices." "About 8,300 miles east of Wall Street, on a stretch of Bangalore's ring road," "this cluster of glass-and-steel towers housed thousands of employees at firms like Goldman Sachs Group Inc and UBS Group AG who played critical roles in everything from risk management to customer service and compliance", ET. "Now the buildings are eerily empty. And with case counts soaring across Bangalore and much of India, work-from-home arrangements that have sustained Wall Street's back operations for months are coming under intense strain." "The super-charged rally in commodity prices has made shipping more expensive than any time in the past decade," so that, "The Baltic Dry Index, a measure of the cost of moving everything from crops to raw materials, rose to 3,240 points on Monday, just below its near 11-year high, set on May 5," ET. "A global rally in commodity prices is upon us, as economies from the US to China take the infrastructure road to recovery from Covid-19. The pressure for cost-push inflation can be mitigated to some extent, by rationalising taxes on key inputs," ET. But that will increase fiscal deficit. "A spate of downgrades last year left India's investment grade ratings hanging by a thread and the severity of the current virus wave is making the main agencies, S&P, Moody's and Fitch agitated again," The Wire. Allowing Covid to get out of hand is increasing costs for the world which, in turn, is adding to our costs. The earth is round, after all.
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