The Economic Times

Term of the Day: Stagflationary Spiral Meaning and economic conditions that lead to it

Term of the Day: A stagflationary spiral is a rare economic crisis where stagnant growth and high unemployment collide with surging prices. This toxic cycle triggers a wage-price feedback loop, forcing costs higher even as the economy shrinks. Unlike standard recessions, central banks face a Catch-22 where raising rates to fight inflation worsens job losses. Global supply shocks and greenflation in 2026 have made this structural risk a top priority for national news and market stability.