New Delhi: India’s finance ministry said in a monthly economic report that India’s inflation is likely to ease in the coming months, partly due to declining commodity prices. India’s annual retail inflation has remained above the central bank’s tolerance range of 2% to 6% since January, even as it eased to 6.77% in October, helped by a slower rise in food prices and a base effect. Got it.
“Lowering international commodity prices and new kharif arrivals are also set to ease inflationary pressures in the coming months,” the report said. “Kharif” refers to the crop season that is harvested in October and November.
The Reserve Bank of India expects inflation to return to its tolerance level of less than 6% in the fourth quarter of the fiscal year beginning April 1, 2022. The finance ministry has also said that the global slowdown may dampen the outlook for the country’s export business.
India’s merchandise trade deficit widened to $26.91 billion in October from $25.71 billion in the previous month, according to official trade data released earlier this month. The economic report also said that monetary tightening had weakened growth prospects globally, but India was well-positioned to grow at a moderately faster rate in the coming years. The removal of Covid-19 restrictions and growth in retail sales are likely to help hiring by firms in the coming quarters, the report said.