Inflation in food articles eased for the fourth straight month, recording (-) 1.29 per cent in August, from zero per cent in July, even as onion and pulses prices spiked.
The government’s reading of the Q1 FY22 GDP numbers was that the economy is on course for a ‘V-shaped’ recovery. How correct is this observation?
We must keep in mind that the growth was despite the second wave of the pandemic and therefore, while there is a base effect, there was also the simultaneous impact of another wave
President Rajapaksa declared an economic emergency last week to contain soaring inflation after a steep fall in the value of the country's currency caused by a spike in food price.
The maximum upward pressure on the index came from the 'miscellaneous group', contributing 0.42 percentage points to the total change.
Members flagged persistence in inflation during monetary policy meeting this month
The article has been prepared by Jibin Jose, Vimal Kishore, and Binod B Bhoi from the Department of Economic and Policy Research, RBI.
The RBI has been mandated to keep inflation at 4 per cent, with a tolerance level of 2 per cent on either side.
However, WPI inflation remained in double-digit for the third consecutive month in July, mainly due to a low base of last year. WPI inflation was (-) 0.25 per cent, in July 2020.
The recent monsoon session ended in an impasse between the government and opposition, and marked a new low in parliamentary discourse.
Going forward, however, the RBI expects a broad-based recovery in demand to pick up with easing of restrictions.
Inflation-adjusted real rates have been negative for over a year, eroding returns from bank deposits and incomes, and prompting savers towards riskier assets.
She pencilled in CPI inflation averaging at 5.5 per cent in FY22 with core inflation slightly above 6 per cent but begin to trend down and average at 4.5 per cent for FY23.
The Opposition leaders feel the Centre is scuttling their voices by not allowing them to raise issues while legislative business is pushed through amidst the din.
PHDCCI president Sanjay Aggarwal said that the WPI-based inflation has been in a double-digit growth trajectory for the past three months, stoked by high prices of fuel and power.