New Delhi: India’s macro risks in the last six weeks have come down due to steps taken by the Center and the government. reserve Bank of India (RBI) and the fall in oil prices due to fears of a global recession, Finance Ministry A report on Thursday said the pace in the economy is better than expected, but cautioned the need to be cautious.
“All this being said, these are still early days of the financial year and there are still many challenges to be overcome. federal Reserve The tightening continues. Global liquidity conditions will strengthen and a fall in asset markets may curb sentiment and spending. Geopolitical risks, near and far, are rife. According to the Finance Ministry’s monthly economic report for June, for now, we will take the marginalized good news, while being cautious and prepared to deal with anticipated and present risks.
The recent fall in international prices of food items, industrial metals and even crude oil is a welcome development for India’s inflation control, said the report prepared by the Department of Economic Affairs.
The revenue generation measures announced recently by the government will not only help in curbing the increase in current account deficit but will also ensure that fiscal slippage, if any, is well contained.
“Overall, on the margins, the first ten days of June and July were better for the Indian macro than the first two months of the current fiscal. This is some cause of relief and also cautious optimism in these times,” as per the report.
It said that as long as retail inflation in India remains above the RBI’s tolerance level of 6%, as it is still at 7% in June 2022, stabilization policy measures will continue to be tested to balance inflation and growth concerns. have to keep.
The report cautioned that global adverse conditions, however, pose a downside risk to growth, as crude oil and edible oils, which have driven inflation in India, remain the major imported components in the consumption basket.
“For the present, their global prices have softened, as recession fears have subsided, in addition, various measures taken by the government to ease inflationary pressures have also been able to contain inflationary prices to some extent. This will weaken inflationary pressures in India and rein in inflation,” according to the report.
It said the services sector continues to improve and manufacturing capacity is stable. There is a clear willingness to invest from the private sector. Banks are ready to lend and their financial position, as shown by the pressure test of the central bank, is quite strong. Faster monthly GST receipts confirm the momentum in economic activity.
It said that as long as retail inflation in India remains above the RBI’s tolerance level of 6%, as it is still at 7% in June 2022, stabilization policy measures will continue to be tested to balance inflation and growth concerns. have to keep.
“All this being said, these are still early days of the financial year and there are still many challenges to be overcome. federal Reserve The tightening continues. Global liquidity conditions will strengthen and a fall in asset markets may curb sentiment and spending. Geopolitical risks, near and far, are rife. According to the Finance Ministry’s monthly economic report for June, for now, we will take the marginalized good news, while being cautious and prepared to deal with anticipated and present risks.
The recent fall in international prices of food items, industrial metals and even crude oil is a welcome development for India’s inflation control, said the report prepared by the Department of Economic Affairs.
The revenue generation measures announced recently by the government will not only help in curbing the increase in current account deficit but will also ensure that fiscal slippage, if any, is well contained.
“Overall, on the margins, the first ten days of June and July were better for the Indian macro than the first two months of the current fiscal. This is some cause of relief and also cautious optimism in these times,” as per the report.
It said that as long as retail inflation in India remains above the RBI’s tolerance level of 6%, as it is still at 7% in June 2022, stabilization policy measures will continue to be tested to balance inflation and growth concerns. have to keep.
The report cautioned that global adverse conditions, however, pose a downside risk to growth, as crude oil and edible oils, which have driven inflation in India, remain the major imported components in the consumption basket.
“For the present, their global prices have softened, as recession fears have subsided, in addition, various measures taken by the government to ease inflationary pressures have also been able to contain inflationary prices to some extent. This will weaken inflationary pressures in India and rein in inflation,” according to the report.
It said the services sector continues to improve and manufacturing capacity is stable. There is a clear willingness to invest from the private sector. Banks are ready to lend and their financial position, as shown by the pressure test of the central bank, is quite strong. Faster monthly GST receipts confirm the momentum in economic activity.
It said that as long as retail inflation in India remains above the RBI’s tolerance level of 6%, as it is still at 7% in June 2022, stabilization policy measures will continue to be tested to balance inflation and growth concerns. have to keep.