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Inflationary pressures appear to be easing: Government report

NEW DELHI: Overall inflationary pressures in India appear to be easing after the government’s initial administrative measures, starting monetary policyand the easing of international commodity prices and supply chain bottlenecks, a finance ministry report said on Saturday.
The Ministry of Finance’s monthly economic report said: “In a time when slowing growth and high inflation are affecting most of the world’s major economies, India’s growth remains strong and inflation is under control”. As external pressures ease, inflationary pressures in India are also likely to ease, while highlighting a number of indicators showing a moderate trend.
Industrial metals and cooking oil prices, after peaking in March 2022, fell on fears of recession in advanced economies. Crude oil prices have fallen 19.1% in August from their peak in June 2022. Supply chains are recovering with port congestion easing.
The report said the impact was reflected in the decline in the Consumer Price Index (CPI-C) and Wholesale price index (WPI) inflation since April 2022. While CPI inflation fell to 7% in August from 7.8% in April, WPI inflation fell from 15.4% in April to 12.4% in August.
Latest data show retail inflation accelerated in August on the back of high food prices, reversing a two-month downtrend and staying above the Reserve Bank of India’s 6% tolerance level for the eighth month. consecutive, this may prompt the central bank to raise interest rates again.
Downside risks to growth will persist as India integrates with the rest of the world and calls for strict vigilance on prices, the report said. There is also no room for complacency on the inflation front as lower sowing for the kharif season calls for skillful management of agricultural stocks and market prices without undue danger. for export of agricultural products”. It speaks to all the rhetoric of the hawkish central bank, the balance sheet of US Federal Reserve contract has not yet commenced.
India’s imports are growing faster, the report says, and thus, comfortably funding them will have to be a high priority. During the winter months, the intense international focus on energy security in advanced countries could increase geopolitical tensions, testing India’s ability to handle energy needs for the future. now.
“In these uncertain times, it can be impossible to be content and sit back for long. Eternal macroeconomic vigilance is the price to pay for stability and sustained growth, the report said. Despite the challenges, the report says India has a lot to gain, especially compared to other countries as its government has chosen not to heed expert advice on expansion. financial and monetary should not last into the pandemic years 2020 and 2021.
“Conservative fiscal management and sound monetary policy will remain essential for India to realize its growth aspirations. Both of these pillars of public policy will help bring down benchmark borrowing costs for governments and the private sector, facilitating public and private sector capital formation,” it said.

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