Inflation rate

Brazil Canada China, People's Republic of

Germany India Italy
Japan Russian Federation South Africa
United Kingdom United States

United States 2.5

United Kingdom 2.7
South Africa 5.3
Russian Federation 2.8
Japan 1.1
Italy 1.1
India 5
Germany 1.6
China, People's Republic of 2.5
Canada 2.2
Brazil 3.5

Developing countries like India there is still a high level of poverty and widespread unemployment. India
is growing fast (7.7% GDP growth rate), more of those unemployed people find employment. As their
Income increases →Demand rises → Price rises → Higher Inflation.

Rising inflation is synonymous with improved growth in GDP. The positive takeaway from inflation is
that it is an indicator of GDP growth. High inflation can affect the purchasing power but certain increase
inflation is required to motivate producers and businesses. Inflation, beyond an acceptable limit is the
real problem. Rising inflation has certain downside risks but it is also essential for growth. It is this
balance that holds the macroeconomic key. Therefore India is a good country to invest if inflation factor
is considered.
 Interest rate
SA India European Union Brazil
Russia U.K. U.S. china
Canada Germany Japan Italy

Italy 0
Japan
-0.1
Germany 0
Canada 1.5
china 4.35
U.S. 2
U.K. 0.75
Russia 7.25
Brazil 6.5
European Union
India 6.5
SA 6.5

From an investors' perspective when interest rates rise, the risk-free returns go up as the government
bond yields rise. Also, corporate bonds offer better returns when the government yields increase. In
such an environment, an investors will naturally opt for higher fixed rate of returns rather than an
uncertain and potentially lower rate of return from equities. When interest rates rise, investors become
risk-averse. Hence, risk is given the first privilege and returns are considered next. Therefore India is a
good country to invest if interest factor is considered as it has a 6.5% interest rate.