CEA says rate hikes may work less on supply-led inflation
In short
Chief Economic Adviser V Anantha Nageswaran said supply shocks will shape the global economy and make rate hikes less effective.
He said fiscal measures will need to do more of the work. The warning matters because inflation driven by supply problems can be harder to control with interest rates alone.
What the reporting says
Chief Economic Adviser V Anantha Nageswaran said supply shocks will dominate the global economy, making monetary policy less effective and shifting more responsibility to fiscal measures. His remarks suggest that interest-rate moves may have limited power against inflation driven by supply factors. The statement is framed as a policy warning rather than a specific rate decision, and the brief gives no new change in policy rates.
Why it matters
Chief Economic Adviser V Anantha Nageswaran said supply shocks will dominate the global economy, making monetary policy less effective and increasing the role of fiscal measures. The comment implies that rate hikes may do less to fight inflation when the pressure comes from supply-side disruptions.