Elevated prices increase upside risks to inflation: D&B
Dun & Bradstreet has come out with its report on Economy Observer.
Dun & Bradstreet has come out with its report on Economy Observer.
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Persistence of high inflation, at a time when India is on the verge of achieving the pre-crisis growth levels, continues to be the cause of concern for the common man and the government authorities alike. The fact that the sources of price pressures has shifted from food articles to primary non-food articles and then manufactured nonfood products has further accentuated the pressure of managing inflation by the Government as well as the RBI. Sustained elevated level of global crude oil prices has been increasing the subsidy burden of the government. In order to adhere to the fiscal consolidation process the Government has raised the petrol prices while an increase in the LPG and diesel prices shortly is also being contemplated. These, along with other factors such as the incomplete pass-through of the non-administered fuel prices, uncertain outlook on the geopolitical tensions in the MENA region, possibility of global commodity prices especially food, minerals and metals staying firm has increased the upside risks to inflation in the near to medium term. Clearly, a high growth level in an economy is not sustainable under a high inflationary situation. As pointed out by RBI
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