Economic Shifts: Inflation Drops, Trade Deficit Surges, and Gold Prices Plunge

India's economy is witnessing significant shifts as inflation falls to a three-month low, sparking speculation of an RBI rate cut. Meanwhile, exports shrink, widening the trade deficit, partly due to a spike in gold imports. Simultaneously, stock markets and the rupee show declines amid global uncertainties.

India's wholesale price inflation has dropped to a three-month low of 1.89% in November, largely driven by reduced food prices. This decline has prompted speculation about the Reserve Bank of India's potential 0.25% interest rate cut in its February policy review.

Simultaneously, the country's exports experienced a 4.85% contraction, amounting to USD 32.11 billion, following robust double-digit growth in October. This contraction has led to India's trade deficit expanding to an unprecedented USD 37.84 billion, influenced significantly by a surge in gold imports, with November figures hitting a record USD 14.86 billion.

Additionally, the Indian rupee fell by 11 paise to a historic low of 84.91 against the US dollar amid weak domestic equities trends. The challenging global climate also weighed on stock markets, with benchmark indices Sensex and Nifty closing down on Monday.

(With inputs from agencies.)