On Saturday, The Reserve Bank of India (RBI), Governor Shaktikanta Das said the rising inflation in India is expected to get slow in a measured manner by the second half of FY23.
While attending an Economic Conclave, organized by the Institute of Economic Growth, New Delhi, Das said, some high-frequency indicators are pointing towards resilience for the recovery in the first quarter (April-June) of 2022-23, as the supply outlook also appears for a favorable downward movement against rising inflammation, Indians could get some relief after the second half of FY23.
Talking about history of inflation in India, Das said, “In early 2022, inflation was expected to moderate significantly to the target rate of four percent by third quarter of FY23, with a projected average inflation rate of 4.5 percent for 2022-23.’’
He added, “This assessment was based on an anticipated normalization of supply chains, the gradual ebbing of Covid-19 infections, and a normal monsoon. The median inflation projection from the Survey of Professional Forecasters at five percent for 2022-23 was also quite benign,” he said.
But, this was disturbed in this year February, due to the Russia-Ukraine war conflict, which has significantly played a major role in a sharp increase in crude oil and other commodity value.
“Global food prices reached a historical high in March and their effects were felt in edible oil, feed cost, and domestic wheat prices. The loss of Rabi wheat production due to an unprecedented heat wave put further pressure on wheat prices. Cost-push pressures were also aggravated by supply chain and logistics bottlenecks due to the war and sanctions,” Das said.
Das ensured everyone that RBI, will take all necessary steps to attain financial and economical stability in the region.
“We have endeavored to ensure a soft landing. These objectives continue to guide our actions even today, and it will continue to be so in the future,” he added.
“Globalization has its pros and cons” Das said. Even a minor change in food price, energy, commodities, and critical inputs can trigger the global supply change.
(with inputs from IANS)