Will food inflation be a pain for next government? All depends on cloud cover -Aparna Iyer

-Livemint.com

Food inflation stood at 1.38% in April after nearly 30 months of disinflation

If it rains are below expectations, the steady rise in food prices would flare up, which would be a headache for the new government

Mumbai:
Indians had the good fortune of experiencing benign food prices for the last two years.

This streak is now about to end as food inflation is back. It was 1.38% in April after nearly 30 months of disinflation.

The sustainability of this rise depends on a single factor, which is monsoon. The weathermen have so far forecasted a normal monsoon for India, but risks still persist.

If it rains are below expectations, the steady rise in food prices would flare up, which would be a headache for the new government.

Also, if the rise in food inflation is more than what has been anticipated by Reserve Bank of India (RBI), the odds for policy rate cuts reduce.

So far though, the rise in food prices has been according to the RBI's expectations. In April, the central bank had indicated food prices would drive up the headline retail inflation to 2.9-3.0% in the first half of FY20.

Please click here to read more.

Livemint.com, 14 May, 2019, https://www.livemint.com/market/mark-to-market/will-food-inflation-be-a-pain-for-next-government-all-depends-on-cloud-cover-1557805185993.html

Related Articles

 

Write Comments

Your email address will not be published. Required fields are marked *

*

Video Archives

Archives

share on Facebook
Twitter
RSS
Feedback
Read Later