Inflationary pressures may persist but food prices to stabilise: Indian finance ministry 

The Indian Finance Ministry stated on August 22 that although food price increases may be “transitory”, India’s inflationary pressures are still ongoing.

According to The Hindu report, the ministry attributed the most recent increase in headline inflation to global uncertainties brought on by the termination of the Black Sea Grain Initiative, which has disrupted supplies of wheat and edible oils as well as problems with domestic farm output.

The Ministry noted that the 11.5 per cent food inflation rate was “perhaps the third highest” since the current Consumer Price Index (CPI) series started in 2014 and that the impact of the worldwide disruptions was “clearly evident” in the sharp increase in retail inflation pace in July to a 15-month high of 7.44 per cent. It noted that core inflation, which excludes the cost of gasoline and food, was at a 39-month low of 4.9 per cent.

The ministry emphasised on the need to maintain macroeconomic stability by stating that the current level of inflationary pressures may continue to rise for the foreseeable future due to domestic and global disruptions. This would require more vigilance from the government and central bank.

“Cereals, pulses and vegetables exhibited double-digit growth… [but] only 48 per cent of food items have inflation of above 6 per cent, and this includes 14 food items with inflation in double digits. Items like tomato, green chilli, ginger and garlic witnessed inflation of more than 50 per cent,” The Hindu quoted the Finance Ministry as saying in its monthly economic review for July.

According to the review, significant food inflation last month was caused by these “abnormal” upticks in select commodities, but this is anticipated to be temporary.

“Tomato prices are likely to decline with the arrival of fresh stocks by the end of August or early September. Further enhanced imports of tur dal are expected to moderate pulses inflation,” it indicated, arguing that these and other government efforts can soon moderate the high food prices in the coming months.

WATCH WION LIVE HERE