Sunday, June 8, 2025
HomeEconomyExpanding supply capacity will contain inflationary pressure, RBI's inflation target credible: S&P

Expanding supply capacity will contain inflationary pressure, RBI’s inflation target credible: S&P

-

[ad_1]

S&P Global Ratings on Wednesday said supply capacity in India is continuing to expand pretty quickly which will help contain inflationary pressure.

S&P Senior Economist Asia Pacific Vishrut Rana said the central bank’s monetary policy and inflation target remains credible and the Reserve Bank of India (RBI) should be able to anchor inflationary expectations. “That remains a manageable challenge,” he said.

India’s retail inflation soared to a 14-month high of 6.21 per cent in October –above the RBI’s tolerance band, mainly on account of rising food prices. It was 5.49 per cent in September.

“… As long as economies’ supplies capacity continues to expand pretty quickly which is happening in India at the moment with emphasis on manufacturing infrastructure, etc, we expect inflationary pressure should be contained,” Rana said at the Asia-Pacific Credit Outlook 2025 conference.

The RBI, which is mandated by the government to contain inflation at 4 per cent (+/- 2 per cent) has projected retail inflation to be 4.5 per cent in the current fiscal year.


“For policymakers and households to balance (consumption and sustainable growth) is to making sure that everyone spends within the means and that can increase savings,” Rana said.He said consumption is a major component for the Indian economy, with private consumption accounting for more than 55 per cent of the overall growth.”We do see a strong consumption-driven growth outlook for economy. Overall, infrastructure is another component of growth. Urban consumption has been the key driver of growth over the past couple of years,” Rana added.

Indian economy is very heavily domestically oriented, he said, adding that about 85 pc of the Indian economy relies on domestic demand, meaning the consumer story is going to drive growth going forward.

Efforts to support agriculture productivity are going to be key in maintaining the momentum of consumption going forward, he said.

Rana further said there is a need to upskill workforce as the focus is shifting to artificial intelligence and digitalisation.

“One issue has been propping up, and we hear about increasingly, is how the rise of artificial intelligence is creating a very difficult labour market for jobs entrants and this is a key challenge for economy to resolve going forward. And policy will have a role to play in upskilling workforce, and tech transition,” Rana added.

Nominations for ET MSME Awards are now open. The last day to apply is November 30, 2024. Click here to submit your entry for any one or more of the 22 categories and stand a chance to win a prestigious award.

[ad_2]

Source link

LATEST POSTS

WitchSpin Casino: Daily ₱777 Bonus Explained

Online casinos attract players by offering exciting games and generous bonuses. One of the most popular features of WitchSpin Casino is its daily ₱777 bonus....

Gaming and Adventure Combined: The Ultimate Guide for Norwegian Tourists

For many Norwegian tourists, traveling is all about exploring new places, immersing themselves in different cultures, and seeking unforgettable adventures. But what if your journey...

Non-Disclosure Agreement for Customer Privacy Protection

In today's digital age, privacy concerns are more significant than ever, especially when it comes to safeguarding the personal and sensitive information of customers. Businesses...

How to Analyze Odds for a Spot Bet

The adrenaline rush of Spot Bet—placing wagers while the action unfolds—attracts countless sports enthusiasts seeking to capitalize on their real-time insights. Yet beneath this thrilling...

Most Popular

spot_img