India vs. Brazil. One of Them Has to Be Right on Inflation
Both countries have been crippled by Covid-19 and beset by surging prices, but they’re taking opposite approaches on monetary policy.
Shaktikanta Das may have the answers.
Photographer: Kiyoshi Ota/BloombergThousands of miles from the corridors of the Federal Reserve and European Central Bank, a struggle between competing views on inflation is unfolding. Two emerging-market icons are watching prices jump and steering very different courses: Brazil is cracking down, while India prefers to wait and hope the phenomenon flames out on its own.
Which of the two approaches proves most effective will shape the lessons a generation of officials take from the pandemic. Covid-19 has claimed almost 4 million lives worldwide, with Brazil and India among the hardest hit. The deepest economic slump since the Great Depression is being followed by an impressive, if uneven, rebound. Both nations, giants in their respective hemispheres, are part of that upswing. But the recovery, much as it is welcome, brings its own set of challenges. Inflation is chief among them.