Measures to curb food inflation will be effective in coming weeks, says finance ministry
On Monday evening, the Ministry of Finance described as “moderate” the increase in retail price inflation from 6.71% in July to 7% in August, and attributed it to an unfavorable base effect and to an increase in food and fuel prices, which he described as “transitional components”. ” consumer price inflation.
Core inflation, which excludes these “transitional components” of food and drink as well as fuel and lighting inflation, was recorded at 5.9% in August, remaining below the limit of 6% tolerance for the fourth month in a row, the ministry said.
“Despite erratic monsoons and negative seasonality in vegetable prices, food inflation in July remains below the April peak of the current year. To soften the prices of edible oils and pulses, tariffs on items imports have been rationalized periodically and stock limits on edible oils have been maintained, to avoid hoarding,” the ministry said.
Pointing out that the inflation of “oils and fats” and “pulses and products” moderated to 5.62 percent and 2.52 percent respectively, the ministry said the government “has banned exports of foodstuffs such as wheat flour/atta, rice, maida, etc. to maintain stability of domestic supplies and curb price increases”.
“The impact of these measures should be felt more significantly in the weeks and months to come,” he said.
“Along with global inflationary pressures, inflationary expectations remain anchored in India with stable core inflation,” the ministry said, citing a July survey from IIM-Ahmedabad which said “the expectations survey corporate inflation in a year fell by 34 basis points to 4.83%”. 5.17% in June”. One basis point is equal to 0.01 percentage point.
“Inflation expectations fell below 5% after 17 months,” the ministry said. “Prices of key inputs like iron ore and steel have sobered up on world markets. This, coupled with the measures taken by the government. rationalizing input pricing structures to increase domestic supply, has helped keep consumer goods cost inflation under control,” he concluded.