India’s retail inflation fell to a near five-year low of 3.54 percent in July. | Photo: Bloomberg
Food inflation in India is likely to ease in the coming months thanks to good harvests after monsoon rains replenished water levels in reservoirs, according to a government report released on Thursday.
The steady progress of the southwest monsoon has supported summer-sown crops, the Finance Ministry said in its monthly economic report.
“Recovery of water levels in reservoirs augurs well for the ongoing kharif (summer-sown) crop production and the upcoming rabi (winter-sown) crop. This will help further reduce food price inflation in the coming months,” the report said.
India’s retail inflation fell to a near five-year low of 3.54 percent in July, largely due to a base effect as food prices eased from earlier highs. Food inflation, which accounts for nearly half of retail inflation, eased to 5.42 percent in July from 9.36 percent in June.
Earlier this week, the country’s central bank said India would need to take a more cautious approach to monetary policy if high food prices persisted and threatened to spill over into broader price inflation.
The government report said higher global demand had boosted India’s goods exports, but imports had also risen due to strong domestic demand. India’s goods trade deficit was $23.5 billion in July, higher than economists’ expectations.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: August 22, 2024 | 20:52 IS
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