These factors, along with fiscal and inflation concerns, cut into investment activity on behalf of India companies.
China's government will be reluctant to ease monetary or fiscal policy while inflation remains high.
From 2000 to the present, spending has increased by an average of 6.0% per fiscal year (inflation was 2.5%).
The implicit hint is that inflation and fiscal stimulus can yield a low-quality growth that is unsustainable.
The party, which has headed a minority government since 1994, has spent three years preaching a new gospel of fiscal rigour and low inflation.
The Bank clearly believes the combined impact of the recent tightening across monetary, macro-prudential and fiscal policies will push inflation to its target, around 4.6% from the 6.3% 12 month rolling inflation currently.
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Its strong fiscal position, receding inflation and expansionary policy measures should ensure a soft economic landing, but it needs to expedite its effort to diversify the source of growth and strengthen structural reforms for inclusive growth.
But with the collapse of Bretton Woods in 1971, due to fiscal incontinence, rising inflation and union militancy, came what Mr Priestland sees as the tragic demise of sagely technocrats and a renaissance of hard merchant power.
Those calling for immediate action may be right that losses should fall mainly on creditors in the form of higher inflation and fiscal transfers since the alternative of forcing citizens of indebted countries to bear the cost of adjustment is politically impossible and likely to lead to a collapse in the euro.
Almost everybody understands that low inflation, good fiscal accounts and healthy international reserves are essential.
In theory, a government could use monetary and fiscal policy to hold back inflation.
India, Asia's third-biggest economy, is suffering a major slowdown, hurt by high inflation and wide fiscal and current account deficits.
The Bank of Japan forecasts inflation in the fiscal year to end-March 2007 of 0.5%: though at the optimistic end of the range of forecasts, it hardly provides much margin for error.
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Prime Minister Shinzo Abe's fiscal policies for growth and inflation -- known to many now as Abenomics -- are not to blame so much as financial quakes and questions from the world's other major economies.
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Government data Thursday showed India's GDP grew just 4.5% in the October-December quarter, about half the rate of growth in the first quarter of the 2011 calendar year, underscoring the severe slowdown due to problems such as elevated inflation and wide fiscal and current account deficits.
His comments point to the gloomy mood in the economy due to bureaucratic red-tapism and slow policy reforms which observers blame for stalling numerous industrial projects and disenchanting foreign investors, leading to a slew of economic troubles such as high inflation and wide fiscal and current-account deficits.
Since the start of the fiscal year in April, India's industrial output has contracted in six of the 10 months till January, reflecting the weak state of the economy, which has been battered by a mix of domestic problems including high inflation and wide fiscal and current account deficits.
And, as the chart shows, spending is even increasing by about twice as fast as inflation in the current fiscal year.
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One, preferred by Republicans, assumes that spending is frozen at the levels agreed in the budget for fiscal 2000 (without adjusting for inflation).
Any hopes that Asian economies had "decoupled" from those in the West and could act as havens for investors were dashed, despite the efforts of policy makers to keep their fiscal houses in shape and temper inflation.
The casual complacency of the President of the United States, some Nobel Prize-winning economists, and other leading politicians and business leaders like Mr. Bloomberg, begs the big question: can a modern advanced democracy exercise sufficient financial self-discipline before external forces or inflation impose the ultimate fiscal crisis?
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According to the IMF, they have strengthened fiscal discipline and banking systems, kept inflation down, motivated reforms and spurred growth.
Doing that without scrapping the inflation target requires much tighter fiscal policy.
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For a start, a more independent central bank with an explicit inflation target will help check fiscal indiscipline by not funding the government's demands for money.
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Inflation rates vary dramatically and fiscal deficits, which have been absent since the start of the oil boom in 2003, are about to re-emerge in some countries this year.
Despite his own sympathy for the left, Brazil's leader has calmed business with his respect for the rule of law, his fiscal discipline and his success in combating inflation (halved to 6% in three years).
Investors who buy gold as a hedge against inflation should be reminded that fiscal austerity and higher long-term rates will push a weak world economy into stagnation, even a recession that hardly provide a bullish scenario for gold.
Industrial and Commercial took a hit in the first and second quarter of 2012 as investors feared a hard landing and questioned a number of fiscal and monetary policies designed to curb inflation and ease up on real estate lending.
Mr Redrado also argues that inflation is primarily caused by loose fiscal policies.
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Mr Serra insists he supports the government's austere fiscal policy, and says he wants an inflation target of just 2.5%.
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