New Delhi: Even if global uncertainty and internal disruptions may keep inflationary pressures elevated for the next months, the finance ministry stated on Tuesday that the inflation in food products is likely to be transitory as preemptive steps by the government and the arrival of fresh crops will lower prices.
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The ministry forecasts that domestic consumption and investment demand will continue to drive GDP moving forward in its July Monthly Economic Review but that increased funding for capital spending by the government in the current fiscal is now leading to crowding in of private investment.
In July 2023, retail inflation measured by the consumer price index reached a 15-month high of 7.44 percent, with increases in the cost of several food items accounting for most of the increase. However, core inflation has remained unchanged at 4.9% for the past 39 months.—Inputs from Agencies