A perfect storm may be gathering over India’s economy, brought on by a peak in inflation just as the country’s festive season, which is critical to consumer demand, gets under way.
Purse strings are loosened most in India during this season, which began with Navratri on Oct. 15 and will linger on with the festival of lights, Diwali, in a couple of weeks and culminate with Christmas.
Navratri, which roughly translates to “nine nights,” and Diwali shopping in India is as important to the country’s retailers and manufacturers as Thanksgiving and New Year holiday shopping is to those in the U.S.
During this period demand rises for everything from edible oils and sugar, used to make an array of sweets that are crucial to festivity in India, to durables like electronics and cars.
That demand will be muted this year, partly because of high prices.
For the first time in three years, inflation is expected to peak in the last quarter before starting to ease, an analysis of the Reuters October poll and actual inflation data showed.
