FOOD INFLATION
Crisil anticipates India's GDP growth to slow to 6.8% in 2024-25
India's GDP growth is expected to slow to 6.8% in FY 2024-25 due to high interest rates and low fiscal impulse. The July-September quarter saw a disappointing 5.4% growth, below the RBI's 7% forecast. Despite this, high-frequency indicators and agricultural growth show signs of potential economic revival.
Food items may shed weight in CPI basket
A revision of India's Consumer Price Index (CPI) is underway, potentially reducing the weightage of food items. This change, based on the latest Household Consumption Expenditure Survey, could lower both headline inflation and its volatility. Experts suggest this shift reflects changing consumption patterns and may lead to more stable inflation readings, closer to the RBI's 4% target.
MoF outlook cautiously optimistic amid clouded global background
India's economic outlook is cautiously optimistic, with strong rural and urban demand, and robust manufacturing and services activity. However, export recovery faces challenges due to softening global demand. Inflation is expected to moderate due to a good harvest, but geopolitical factors pose a risk. Foreign portfolio investors turned net sellers in October.
India's economic outlook for coming months 'cautiously optimistic': Finmin Report
India's economy shows promising signs. Agriculture is expected to perform well. Economic activity is picking up. Jobs are increasing. However, global economic slowdown and geopolitical tensions pose challenges. India's foreign exchange reserves have grown significantly. The future depends on global factors and US policy.
RBI's inflation 'horse' is at war but FinMin is not worried
In its monthly economic review, the Finance Ministry highlighted that geopolitical factors will continue to affect domestic inflation and supply chains, despite an expected moderation in the prices of key food items. The economic review said trends in early November indicated a moderation in key food prices, although geopolitical factors are likely to keep influencing domestic inflation and supply chains.
S&P cuts India's growth targets for the next two fiscal years
S&P affirms India's FY25 GDP growth at 6.8%. Growth forecasts for FY26 and FY27 are lowered to 6.7% and 6.8%, respectively. High interest rates and lower fiscal impulse are cited as factors. RBI believes recent economic weakness is temporary. Private consumption and festival spending are driving demand. Food inflation remains a concern, potentially delaying RBI rate cuts.
Kitchen essentials buck slowdown trend: Hopes of demand recovery rise as staples segment sees double-digit growth in Sept qtr
Despite an overall consumption slowdown, sales of essential household items like edible oil, spices, and toothpaste are experiencing double-digit growth. This trend, observed in the July-September quarter, suggests consumers are prioritizing necessities, offering hope for an economic rebound.
Staples, essentials show strong growth amid consumption slowdown, signalling potential recovery
Despite an economic slowdown, Indian consumers are prioritizing essential goods. Staples like edible oil and spices saw double-digit growth in the last quarter, indicating a potential demand recovery on the horizon.
Indian economy¡¯s road to recovery? Private consumption driving domestic demand again, says RBI
The Reserve Bank of India's latest bulletin highlights that India's economic slowdown in Q2 of 2024-25 has eased, with private consumption driving domestic demand, especially boosted by festival spending in Q3. Despite global economic resilience, the RBI noted challenges such as rising protectionism and fragile confidence.
RBI wary of more than just food inflation: What else is a headache for Das & Co
The Reserve Bank of India is concerned about rising core inflation. Core inflation, excluding volatile items, rose to 3.8 percent in October. The central bank says rising costs are impacting consumers and businesses. The RBI's Monetary Policy Committee may consider this trend in its December meeting. The government is urging the RBI to cut interest rates to boost the economy.
India in a sweet spot: Moody's report highlights robust economic growth momentum amid inflation challenges
India's economy is experiencing robust growth, projected to hit 7.2% in 2024, driven by strong consumer spending and investment. Despite recent inflation spikes due to food prices, Moody's predicts moderation and highlights India's strong economic fundamentals and resilient financial position.
Wholesale inflation quickens to 2.36% in October over rising food prices
India's wholesale price index rose to 2.36 percent in October. Food prices increased, pushing retail inflation to a 14-month high. The Reserve Bank of India held its benchmark interest rate steady. The central bank maintained its inflation forecast for the fiscal year at 4.5 percent. Food price volatility remains a concern for inflation and economic stability.
If we exclude vegetable prices, CPI inflation remains in RBI's range: UBI research
India's retail inflation surged to a 14-month high of 6.21% in October, fueled by soaring food prices, particularly a 42.18% jump in vegetable costs. A Union Bank report attributes the spike to seasonal factors and expects a correction, but highlights concerns over rising edible oil and cereal prices.
India's middle class tightens its belt, squeezed by food inflation
India's middle class is tightening its belt as high inflation eats into their spending power. This slowdown in urban consumption, evident in declining sales of everything from cookies to restaurant meals, threatens India's economic growth. While official projections remain optimistic, some economists are less sanguine, pointing to shrinking wages and rising costs as key factors impacting urban spending.
Rate cut unlikely even in February, inflation to dip January onwards: SBI research
The Reserve Bank of India may not reduce interest rates in February. Inflation is a concern. SBI Research predicts inflation will ease slightly from January. However, this easing will be due to base effects and not lower prices. Food inflation, particularly for vegetables, remains high in many states. SBI Research believes the first rate cut will happen after February 2025.
India's retail inflation in October quickens to 6.21%, breaches RBI tolerance band for first time since Aug 2023
India's retail inflation rose to 6.21 percent in October. This is a significant increase from September's 5.49 percent. Food prices are the main reason for this surge. This is the first time since August that inflation has gone beyond the Reserve Bank of India's 6 percent limit. The rise in onion prices is a major concern.
CPI inflation is likely to breach 6% in October: UBI report
The continued spurt in food prices and fading of the high base effect likely led to a spike in October retail inflation figures. According to a report by the Union Bank of India, retail inflation based on the Consumer Price Index is seen jumping to 6.15 per cent, breaching RBI's 6 per cent tolerance band.
Festive Vibes: Economists see food inflation and geopolitical conflicts as possible headwinds
The Unified Payments Interface (UPI) settled 16.58 billion transactions in October 2024, up 45% yearon-year. The demand for work under the government¡¯s flagship rural employment scheme fell for the 12th straight month in October from a year before, dropping 9.2% from a year earlier, indicating availability of job opportunities elsewhere in the economy.
Why headline inflation may not be the most accurate to 'gauge' demand in Indian economy
The Finance Ministry's Economic Survey indicates softening inflation expectations in India, with underlying demand remaining stable despite food price fluctuations. It emphasizes that core inflation remains within a comfortable range, and projections for a healthy kharif harvest are expected to mitigate future price pressures.
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