Growth, inflation & external balance: 'India better placed’
- The sustained decline in crude oil price since June and the decline in the inflation rate below 7%, combined with the impressive growth in tax revenue collection, translated into a significant easing of concerns over India’s growth and inflation in 2022-23.
Current Position
- For now, India looks better placed on the growth-inflation-external balance triangle for 2022-23 than it did two months ago
- Noting that domestic inflationary pressures had moderated, the Ministry in its economic review for July said that these pressures were expected to be capped, in the absence of any fresh shocks, over the coming months due to the global decline in commodity prices and steps taken by the government and the central bank.
What to Expect
- Softening of inflationary pressures in India is further on the anvil as the prices of important raw materials such as iron ore, copper, tin, etc. that feed into the domestic manufacturing process, globally trended downwards in July 2022.”