Even as central banks across several countries continue to hike their interest rates to cap rising inflation, India stands like an “oasis” in this era of uncertainty, according to the SBI Research’s latest Ecowrap report. Compared to developed economies like the US, UK and Germany, the report released on Friday shows India has done markedly better be it cost of living, food prices or even energy costs.
The report authored by Group Chief Economic Adviser of SBI Soumya Kanti Ghosh compared the current global economic situation with the famous musical drama “Wicked”. Ghosh in his report said, a famous character Glinda in this drama proudly proclaimed that the alphabet ‘G’ in her name is silent and similarly it seems that the word “good” may have temporarily vanished from the global economy.
To understand how India has performed in terms of the cost of living, in a common currency, SBI Research compared the cost of living in India with the US, the UK and Germany by adjusting each country’s exchange rate to achieve parity with the rupee and arrived at a comparable cost of living across these countries in rupee terms. Upon having analysed, it found if the household budget/cost of living was Rs 100 in September 2021 across all countries, it has now increased by Rs 12 in both the US and India, but it has increased by Rs 20 in Germany and Rs 23 in the UK.
In terms of increase in food prices too, India performed the best. What cost Rs 100 in September 2021 across countries, now is up by Rs 25 in the US, Rs 18 in the UK, Rs 33 in Germany and Rs 15 in India. Coming to the increase in energy prices, what cost Rs 100 in September 2021 across countries, is now up by Rs 12 in the US, Rs 93 in the UK and Rs 62 in Germany and Rs 16 in India.
“Clearly, there has been a deterioration in the cost of living in the aftermath of global mayhem, but India still performs significantly better compared with countries supposed to be the epitome of sound macro management,” Ghosh said. Since the beginning of the Ukraine-Russia conflict in early 2022, there has been a significant surge in prices across developed as well as emerging economies.
Ghosh in his Ecowrap report further said it seems that India has done quite well in managing the cost of living in comparison with other countries.