It's only a slight oversimplification to say that the global economy is now a wrestling match between an energy shock and a tech boom. On one side is the oil shock radiating from the US war on Iran, which has pushed Brent crude back above $90 a barrel and revived concerns of a return to April's $120 highs. On the other is a spectacular, but unevenly distributed, AI boom.
RBI's MPC, meeting in the first week of August, will set its policy rate chiefly on domestic considerations, as it should. But external conditions often matter on the margin. So, it's worth reviewing the dilemma they pose for the economy.
