General Knowledge · Banking and Macroeconomics
How does 'Cost-Push Inflation' driven by supply-side shocks (such as rising fuel and raw material prices) primarily impact corporate borrowers in manufacturing and logistics?
- 1It has no impact since debt amounts remain constant in nominal terms.
- 2It guarantees immediate rate cuts by the central bank to offset operating losses.
- 3It increases credit risk due to input cost pressure and margin squeeze.✓
- 4It automatically increases real profit margins by inflating asset values.
Correct answer
It increases credit risk due to input cost pressure and margin squeeze.
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