New Delhi: Indian fiscal And monetary officials should remain vigilant, even as the nation is one of the bright spots amid a “gloomy global scenario where the dark clouds of recession gather”, the finance ministry said on Saturday.
“The inflation trajectory is dependent on geopolitical developments,” the ministry said in its monthly economic review.
The report said that despite the rapid depreciation of the Indian rupee, the country has substantial foreign exchange reserves.
of India Wholesale inflation eased from its peak of 16.6 per cent in May to 10.7 per cent in September on softening commodity prices and government measures, but retail inflation remains above the Reserve Bank. of India The upper tolerance band due to the uptick in food prices, the report said.
“Even though commodity prices have moderated, a rise in imported inflation is expected to be an upside risk with crude oil outlook remaining uncertain and geopolitical conditions to remain significantly limited,” it added.
However, food inflation is expected to moderate as the harvest and procurement season progresses, contributing to falling headline retail inflation for the rest of the year. fiscal year.
The report said measures taken by the government to reduce the burden of rising inflation on consumers, including increase in fertilizer subsidies, among other welfare measures, could put pressure on finances. -Reuters
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