Supply Shocks Limit Monetary Policy Effectiveness: India CEA

India's Chief Economic Advisor V Anantha Nageswaran has highlighted that supply chain disruptions are diminishing the effectiveness of interest rate adjustments as tools for controlling inflation.

He emphasized that fiscal policies will become increasingly important for addressing supply-induced inflationary pressures, noting that many countries have struggled to meet inflation targets since 2022.

This signals a structural shift in how policymakers must approach inflation management in an era of persistent supply shocks.