The finance ministry report also warned that America’s tight monetary policy is risky for the future. Due to this, stock market price fall, currency exchange rate may be weak.
Inflationary pressure will ease soon
Despite the aggressive stance on rate hikes by central banks across the world, the Indian economy is well positioned to grow at a moderate to high pace in the coming years due to macroeconomic stability. This was stated in the report published by the Ministry of Finance on Thursday. The report also said that with the arrival of the kharif crop, inflationary pressures will ease in the coming months and employment opportunities will improve along with business prospects. At the same time, the ministry’s monthly economic review report for October 2022 also warned that America’s tight monetary policy is a future risk. This can lead to declines in stock markets, weakness in currency exchange rates and higher yields in bonds.
Fear of recession due to inflation
The report said that a sharp decline in global economic growth estimates, high inflation and deteriorating financial conditions have raised fears of a global recession. Also, the global recession may have an indirect impact on India’s export business. However, structural reforms coupled with resilient domestic demand, a strong financial system and a revived investment cycle will help propel economic growth.
According to the report, while tight monetary policy around the world has weakened economic growth forecasts, the Indian economy appears well-positioned to grow at a moderate pace in the coming years due to macroeconomic stability.
Inflation rate will come down with new crops
The ministry said that so far in the current financial year, the government has addressed the country’s food security concerns and the government is making it a priority. Lower international commodity prices and the arrival of new kharif crops will also help ease inflationary pressures in the coming months, mainly wholesale and retail inflation due to supply chain disruptions following the Russia-Ukraine war in February this year, the report said. The country remains high most of the year. But it decreased in October. It is worth noting that Russia and Ukraine are the most important producers of essential agricultural products. It also includes raw materials such as wheat, corn, sunflower seeds and fertilizers.