MUMBAI // Lokhandpal Chowbey, a watchman at a block of apartments in Mumbai who earns 6,000 rupees (Dh328) a month, finds managing his monthly household expenses increasingly challenging.
“The price of vegetables is rising and that makes it very difficult to manage other things like paying for my children’s education,” he says.
Inflation, which had eased over the past couple of years, has shot up again in India, driven largely by a rise in food prices.
This comes at a time when India’s “rock star” central banker Raghuram Rajan is about to leave office in a couple of weeks, after completing his three-year tenure. There had earlier been widespread expectations and hopes that he would do another term.
“Inflation continues to be a problem,” said V K Vijayakumar, the chief investment strategist at Geojit BNP Paribas.
“Even though the commodity price crash has brought down inflation from the high levels of 2013, it continues to be an area of concern, causing distress to poor people and posing major challenges to policymakers.”
Official figures released on Tuesday revealed that wholesale prices in India rose above expectations by 3.55 per cent last month compared with a year earlier because of higher food costs. This was near a two-year high for inflation. Food prices surged by double digits of 11.82 per cent from the same month last year, compared to a rise of 8.18 per cent in June. Prices of vegetables and fruits rocketed 22 per cent last month year-on-year, while grains shot up 13.6 per cent.
Wholesale prices have risen for four consecutive months to July, following 17 months of deflation, as prices eased, partly because of lower oil prices.
Mr Vijayakumar describes food inflation as “a major area of concern”. The price of tomatoes in particular became a talking point in recent months, with the cost of tomatoes hitting 100 rupees a kilogram as drought hit parts of the country. The supply of pulses such as lentils has failed to keep pace with the rising demand for protein-rich food.
“Since people spend a major part of their income on food in a poor country – in India food articles account for 45 per cent of the consumer price index – inflation really hurts, particularly the poor,” Mr Vijayakumar said.
The cost of services, including health care and education, is another area in which prices are rising.
So pressing is the issue of inflation, that India’s prime minister, Narendra Modi, in his independence day address on Monday said his government was striving to keep inflation in check.
“I will do my best and will not let the food plate of the poor person get costlier,” Mr Modi said.
A concern for businesses is that high levels of inflation prevent the Reserve Bank of India (RBI) from cutting interest rates. Industry has been calling for interest rates to be trimmed to make it cheaper for businesses and consumers to borrow funds, which would help to stimulate the economy.
“We think that [inflation] will accelerate further,” said Shilan Shah, the India economist at Capital Economics. “In particular, the deflationary impact from the sharp fall in global oil prices should continue to ease. This supports our view that there is little scope for further monetary loosening.” He forecasts that interest rates will remain on hold at 6.5 per cent for the rest of this year and next year.
“The low levels of industrial production and poor corporate profitability have been major drags on the economy,” Mr Vijayakumar said.
“The deficiency in aggregate demand is a serious issue adversely impacting private investment and economic growth. A rate cut can help in reviving demand and stimulating investment and growth, which is why businesses and the industrial sector have been clamouring for lower interest rates.
“However, the RBI is not likely to oblige when inflation rates are trending up and remain above the RBI’s comfort zone.”
Mr Rajan is set to step down as governor of the RBI on September 4. There are some concerns that the transition could prove to be a setback when it comes to controlling the problem of runaway inflation.
“The existing governor was doing a good job, we should have given him more time,” said Arun Kharat, the founder and director of Wings Travels, a travel company based in Pune.
“It will start again from ground zero with a new vision, which can actually slow down India’s growth.”
He said the inflation situation desperately needed to be managed.
“This may lead to [the] rich becoming richer and [the] poor [becoming] poorer,” he said. “One can’t buy all that they want for their basic needs. This also leads to holding and stocking of goods to benefit from the inflation anticipation.”
Arun Singh, the lead economist at business information provider Dun & Bradstreet India, said there were factors on the horizon that could be set to stoke inflation.
“While it is expected that the supply of food in the market post a period of better monsoon will alleviate some of the inflationary pressures, the expected rise in rural demand along with the implementation of one-rank one-pension for retired defence employees and the seventh pay commission recommendations will provide upward pressure on the overall inflation,” he said.
The implementation of the pay commission’s recommendations for public sector employees in India, which include an increase in housing allowances, are expected to boost consumption and could drive prices higher.
The recently announced goods and service tax (GST) could also push inflation upwards in the short to medium term, Mr Singh said. He said it was reassuring that the authorities are taking steps to bring inflation under control.
“The government has been undertaking supply side measures [for crops] such as supply-management measures and the introduction of the electronic national agriculture market-trading portal, allocation of funds to strengthen the warehousing infrastructure,” Mr Singh said.
Mr Vijayakumar is fairly optimistic the inflation scenario will improve in the coming months, with relatively good monsoon rains this season, following two years of weak rainfall.
“The best news from the inflation perspective is coming from the progress of the monsoon,” he said
“If monsoon continues to be good during August and September, a bumper harvest is likely. A bumper harvest will certainly bring food inflation down. If this happens, the RBI can cut interest rates by another 25 basis points by December, thereby providing a major boost to business and the economy.”
For Mr Chowbey, as he struggles to manage his household expenses amid rising prices, such relief cannot come soon enough.
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The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The specs: 2019 Audi A8
Price From Dh390,000
Engine 3.0L V6 turbo
Gearbox Eight-speed automatic
Power 345hp @ 5,000rpm
Torque 500Nm @ 1,370rpm
Fuel economy, combined 7.5L / 100km
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
ABU%20DHABI'S%20KEY%20TOURISM%20GOALS%3A%20BY%20THE%20NUMBERS
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The Year Earth Changed
Directed by:Tom Beard
Narrated by: Sir David Attenborough
Stars: 4
SPEC%20SHEET%3A%20SAMSUNG%20GALAXY%20S24%20ULTRA
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Mountain%20Boy
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Zainab%20Shaheen%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Naser%20Al%20Messabi%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3C%2Fstrong%3E%3A%203%2F5%3C%2Fp%3E%0A
The specs
Price: From Dh529,000
Engine: 5-litre V8
Transmission: Eight-speed auto
Power: 520hp
Torque: 625Nm
Fuel economy, combined: 12.8L/100km
UAE currency: the story behind the money in your pockets
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
How much sugar is in chocolate Easter eggs?
- The 169g Crunchie egg has 15.9g of sugar per 25g serving, working out at around 107g of sugar per egg
- The 190g Maltesers Teasers egg contains 58g of sugar per 100g for the egg and 19.6g of sugar in each of the two Teasers bars that come with it
- The 188g Smarties egg has 113g of sugar per egg and 22.8g in the tube of Smarties it contains
- The Milky Bar white chocolate Egg Hunt Pack contains eight eggs at 7.7g of sugar per egg
- The Cadbury Creme Egg contains 26g of sugar per 40g egg
COMPANY%20PROFILE
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
SPEC%20SHEET
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If%20you%20go
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Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
BUNDESLIGA FIXTURES
Friday Stuttgart v Cologne (Kick-off 10.30pm UAE)
Saturday RB Leipzig v Hertha Berlin (5.30pm)
Mainz v Borussia Monchengladbach (5.30pm)
Bayern Munich v Eintracht Frankfurt (5.30pm)
Union Berlin v SC Freiburg (5.30pm)
Borussia Dortmund v Schalke (5.30pm)
Sunday Wolfsburg v Arminia (6.30pm)
Werder Bremen v Hoffenheim (9pm)
Bayer Leverkusen v Augsburg (11.30pm)
Squad
Ali Kasheif, Salim Rashid, Khalifa Al Hammadi, Khalfan Mubarak, Ali Mabkhout, Omar Abdulrahman, Mohammed Al Attas, Abdullah Ramadan, Zayed Al Ameri (Al Jazira), Mohammed Al Shamsi, Hamdan Al Kamali, Mohammed Barghash, Khalil Al Hammadi (Al Wahda), Khalid Essa, Mohammed Shaker, Ahmed Barman, Bandar Al Ahbabi (Al Ain), Al Hassan Saleh, Majid Suroor (Sharjah) Walid Abbas, Ahmed Khalil (Shabab Al Ahli), Tariq Ahmed, Jasim Yaqoub (Al Nasr), Ali Saleh, Ali Salmeen (Al Wasl), Hassan Al Muharami (Baniyas)
'Ghostbusters: From Beyond'
Director: Jason Reitman
Starring: Paul Rudd, Carrie Coon, Finn Wolfhard, Mckenna Grace
Rating: 2/5
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Scores
Scotland 54-17 Fiji
England 15-16 New Zealand
TERMINAL HIGH ALTITUDE AREA DEFENCE (THAAD)
What is THAAD?
It is considered to be the US's most superior missile defence system.
Production:
It was created in 2008.
Speed:
THAAD missiles can travel at over Mach 8, so fast that it is hypersonic.
Abilities:
THAAD is designed to take out ballistic missiles as they are on their downward trajectory towards their target, otherwise known as the "terminal phase".
Purpose:
To protect high-value strategic sites, such as airfields or population centres.
Range:
THAAD can target projectiles inside and outside the Earth's atmosphere, at an altitude of 150 kilometres above the Earth's surface.
Creators:
Lockheed Martin was originally granted the contract to develop the system in 1992. Defence company Raytheon sub-contracts to develop other major parts of the system, such as ground-based radar.
UAE and THAAD:
In 2011, the UAE became the first country outside of the US to buy two THAAD missile defence systems. It then stationed them in 2016, becoming the first Gulf country to do so.
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
'Cheb%20Khaled'
%3Cp%3E%3Cstrong%3EArtist%3A%20%3C%2Fstrong%3EKhaled%3Cbr%3E%3Cstrong%3ELabel%3A%20%3C%2Fstrong%3EBelieve%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million