Food Inflation To Calm Down In Next Few Months, Says Finance Ministry’s Report

Indian economy’s retail inflation level climbed to 6.21 per cent in October and hit a 14-month high. This jump was driven by a hike in food inflation in a ‘few vegetables’, the review noted

The report, released by the Department of Economic Affairs, stated that multiple high-frequency indicators of economic activity displayed a recovery in October amid a clouded global economy and a short period of easing momentum over the monsoon months. 

Source : Unsplash

The finance ministry in its latest economic review for October revealed that food inflation is expected to slowdown in the upcoming months. The officials in the monthly review said that this ease in food prices is likely to be supported by a bumper kharif harvest.

Indian economy’s retail inflation level climbed to 6.21 per cent in October and hit a 14-month high, reported Moneycontrol. This jump was driven by a hike in food inflation in a ‘few vegetables’, the review noted.

“Supply disruptions from heavy rains in major producing states contributed to price pressures in tomatoes, onions, and potatoes, while elevated global prices drove up oil and fat inflation,” the ministry in the review stated.

However, a helpful monsoon, sufficient reservoir levels, and elevated minimum support prices are expected to enhance rabi sowing and production.

The economic review noted that the Indian economy is standing resilient in the face of a mixed global outlook. The report, released by the Department of Economic Affairs, stated that multiple high-frequency indicators of economic activity displayed a recovery in October amid a clouded global economy and a short period of easing momentum over the monsoon months. 

These economic indicators include rural and urban demand and variables impacting supply such as Purchasing Managers’ Index and E-way bill generation.

“On the employment front, the formal workforce is expanding, with notable increases in manufacturing jobs and a strong inflow of youth into organised sectors,” the ministry said.

The authorities remained ‘cautiously optimistic’ regarding the economic outlook for the next few months and said that agriculture is likely to gain from favourable monsoon conditions, higher MSPs, and sufficient input supply.