Accordingly food inflation rate may come down in india in the coming time and at the same time economic growth rate may see a boom. The reason for this is the benefit to the agriculture sector due to good monsoon and increase in minimum support price. This information was given in the monthly economic review of the Finance Ministry 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 the pressure on the prices of tomatoes, onions and potatoes due to supply disruptions due to heavy rains in major producing states.
Perhaps the report said that despite the current price pressure on select food items, good prospects of agricultural production have softened the inflation outlook. Trends in early november have indicated a softening in the prices of major food items. However, geopolitical factors may continue to affect domestic inflation and supply chains. After a brief slowdown in the monsoon months amid global instability, several high frequency indicators of economic activity in india have shown improvement in October. This includes indicators reflecting rural and urban demand such as the Purchasing Managers Index and e-way bills.
Moreover according to the report, the formal workforce is expanding on the employment front, there has been strong growth in jobs in the manufacturing sector and the number of youth in the organized sector has increased. Concerns about the external sector remain. Challenges to improve exports will remain due to slow demand in developed markets. However, exports of services will continue to grow. The report further said that the war in russia and ukraine has raised concerns for the financial markets. Due to this, there has been an increase in demand for safe assets like US Treasury and Gold. However, global geo-political political conditions remain fragile.
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