Inflation outlook positive: Finmin – Times of India

by The Technical Blogs


New Delhi: The country’s inflation outlook for the months ahead is positive and core inflation is trending downwards, indicating a broad-based moderation in price pressures, the finance ministry’s monthly economic outlook for Feb said on Friday.
“The pick-up in summer sowing is likely to help reduce food prices,” the report said, adding, retail inflation remained stable and within the target range for sixth consecutive month.”Driven by strong domestic growth and benign global commodity prices, core inflation is declining continuously. Timely and multi-frontal supply-side measures by govt ave also helped the cause of price stability,” said the report. Core inflation refers to inflation minus food and fuel.

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It said strong growth accompanied by stable inflation and external account and progressive employment outlook helped the Indian economy close the current financial year on a positive note. But it cautioned that there are headwinds like indications of hardening crude oil prices and global supply chain bottlenecks to trade. “Nonetheless, India, on the whole, looks forward to a bright outlook for FY25,” said the report prepared by department of economic affairs.
It said steady consumption demand is backed by resilient urban demand conditions and added that recovery in rural consumption demand is expected to be strengthened by forecast of a normal monsoon in FY25.
It also said latest Household Consumption Expenditure Survey (HCES) 2022-2023 results suggest inclusive growth in past decade, also reiterating improved rural demand scenarios.
The report said current container freight rates are approximately half the peaks recorded during the Covid crisis. It cautioned that sustained increases in shipping costs due to disruption can drive up inflation. “The crisis is also reverberating in global food prices. Disruptions in grain shipments from the Russian Federation, Ukraine, and Europe pose risks to global food security,” the report said, referring to the ongoing crisis in the Red Sea shipping route.


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