‘Economy on a strong path’, GDP growth at 8.2% in FY24, likely 6.5-7% in FY25 – Firstpost

Economic Survey 2024: Prices under control, short-term inflation outlook favourable

India’s short-term inflation outlook is favourable and expectations of a normal monsoon and moderating global prices of key imported items lend credence to the RBI and IMF forecasts, the Economic Survey said on Monday. The Economic Survey tabled in Parliament today said “prudent administrative measures” have helped India keep inflation in check compared to the rest of the world in the post-Covid recovery phase.

To ensure long-term policy stability, the 2023-24 survey proposed targeted efforts to increase production of key oilseeds, expand area under pulses, and assess progress in developing modern storage facilities for specific crops.

“Since 2020, countries have been facing challenges in controlling inflation. In FY23, India’s consumer price index (CPI)-based retail inflation was mainly affected by higher food inflation, while core inflation remained subdued. Externally, the Russia-Ukraine war led to price pressures, while domestically, extreme summer heat and uneven rainfall weighed on food prices,” the report said.

“However, since May 2022, monetary policy has broadly focused on absorbing excess liquidity in the system by raising the policy repo rate by 250 basis points from 4 percent in May 2022 to 6.5 percent in February 2023. Thereafter, the policy rate was kept unchanged by focusing on the gradual withdrawal of accommodation, with the aim of aligning inflation with the target while supporting growth. As a result, the persistent and sticky core inflation observed in FY23 declined to 3.1 percent in June 2024,” the Economic Survey said.