Indian economy will grow at ‘medium-fast’ pace, inflation will come down: Finance Ministry
New Delhi. Despite the accommodative stance of monetary policy globally, the Indian economy is well positioned to grow at a medium-fast pace in the coming years on the back of macroeconomic stability. In a report released on Thursday, the Finance Ministry said that with the arrival of Kharif crop, inflationary pressure will ease in the coming months and along with improving business prospects, employment opportunities will also increase.
The ministry’s monthly economic review report for October 2022 also cautioned that tighter monetary policy in the US is a future risk. This can lead to a fall in the stock market, weakness in the exchange rate of currencies and higher yields on bonds.
The report said that a sharp decline in global economic growth estimates, high inflation and worsening financial conditions have raised fears of a global recession. Also, the global slowdown can also have an indirect impact on India’s export business. However, structural reforms coupled with resilient domestic demand, a strong financial system and a reviving investment cycle will help propel economic growth.
The report said, while tight monetary policy in the world has weakened the economic growth forecast, on the other hand, the Indian economy appears to be well positioned to grow at a moderate pace in the coming years due to macroeconomic stability.
The ministry said that in the current financial year so far, the government has addressed the food security concerns of the country and the government is paying attention to it on priority. According to the report, easing international commodity prices and new Kharif crop arrivals will also help ease inflationary pressures in the coming months.
Wholesale and retail inflation in the country remained elevated for most of the year mainly due to supply chain disruptions following the Russia-Ukraine war in February this year. However, it decreased in October. It is noteworthy that Russia and Ukraine are among the most important producers of essential agricultural commodities. It also includes raw materials such as wheat, corn, sunflower seeds and fertilizers.