Friday the 13th Horror : Inflation Rate jumps to 8.75%

Looks like Friday the 13th is indeed unlucky for the Indian economy (to an extent the world economy as well). Inflation Rate in India has jumped to 8.75% as of May 31, 2008. This jump does not account for the increase in petroleum prices announced last week. The impact of that increase is yet to be felt. Leading Indian as well as global economists are of the view that the inflation rate in India might touch the double digit mark soon, sending the economy into a slump and the markets into a prolonged bear hug. With inflation rising close to the double digit mark, the real returns on fixed deposits are slowly turning negative. This means even at a return of close to 10% on FD’s investors would make a post tax loss when inflation is acounted for. This is really bad news!