New Delhi: The Ministry of Finance on Friday said that the increase in global commodity prices, especially crude oil and higher logistics costs, pose a reverse risk of inflation, despite trying to attract comfort from monsoons and open the economy to reduce economic price pressure.
Although the monthly economic report was silent at the increase in prices of gasoline and diesel pumps, acknowledging how food inflation grew on rapid clips in urban areas.
The surge in inflation has pushed the RBI to accommodate further discounts because wholesale price inflation jumped to 12.9%, the highest since at least 2012, while retail inflation was pegged at 6.3%, six months high.
“Local restrictions because the second wave can cause some supply side disorders that contribute to price pressure in May 2021.
With encouraging progress from southwest mononsun, the supply side intervention in pulses and edible oil markets, and gradual opening, and gradual opening , with a decrease in caseload it will reduce the pressure for the future, “said the Report by the Ministry of Finance’s Economic Division.
It presents a reddish image on economic recovery, while calling for fast vaccination and bridging the gap in health infrastructure.
The ministry expects a recent announcement to increase consumption sentiment and the Capex cycle.
Pointing on the steps of the recent economic assistance, the report said, “This package is expected to be more oiled with Capex wheel oil”.