New Delhi, November 25 (IANS). There may be a decline in food inflation rate in India in the coming time and at the same time there may be a rise in the economic growth rate. This is because the agriculture sector is benefiting due to good monsoon and increase in minimum support price. This information was given in the monthly economic review of the Finance Ministry released on Monday.
India’s retail inflation rate stood at 6.21 percent in October, which was the highest level in 14 months. This was due to increased pressure on prices of tomatoes, onions and potatoes due to supply disruptions due to heavy rains in major producing states.
Despite ongoing price pressure on select food items, good agricultural production prospects have softened the inflation outlook, the report said. Trends in early November have indicated softening of prices of key food items. However, geopolitical factors may continue to influence domestic inflation rates and supply chains.
After a brief slowdown during the monsoon months amid global instability, several high frequency indicators of economic activity in India have seen improvement in October.
This includes indicators reflecting rural and urban demand such as Purchasing Managers’ Index and e-way bill.
According to the report, on the employment front, the formal workforce is expanding, with strong growth in manufacturing jobs and an increase in the number of youth in organized sectors.
Concerns remain regarding the external sector. Due to slow demand in developed markets, challenges will remain regarding improvement in exports. However, services exports will continue to grow.
The report further said that the wars in Russia and Ukraine have created concerns for financial markets. Due to this, there has been an increase in demand for safe assets like US Treasury and gold. However, global geopolitical conditions remain delicate.
–IANS
ABS/ABM
