In India, reports from the Reserve Bank of India are suggesting that the inflation rate could start to fall after soaring highs in the month of September. This outcome is due to the ease from the food and energy pricing pressures. On the other hand, the contact-based sectors are moving towards a recovery in the latest Indian economy. The RBI monthly report also suggested that the spending for festivities are boosting quite a bit on the consumption in the market and is assisting an overall demand for other components.
Business Outreach Magazine is towards providing a comprehensive inflation report today for our readers. In the month of September, the retail inflation rate skyrocketed to a five-month high reaching about 7.4%. The figure was about 7% in August and significantly increased for a period of nine months. Earlier, the mandate provided by the Reserve Bank of India was between 2% to 6%.
The RBI Report :
An RBI report says, “Inflation is set to ease from its September high, albeit stubbornly, on the back of easing momentum and favorable base effects”. It is probably indicated that due to the reduced pressure on the supply chain sector, the food prices along with beverage costs will ease since they constitute half of the spectrum of consumer inflation.
But the continuous soaring inflation above the benchmark figures for about three back-to-back quarters mandates certain accountability processes. The Reserve Bank of India also stated that the monetary policy stands flexible when addressing inflation with a set target.
For the third consecutive quarter, figures of price gain were above RBI’s targeted framework for inflation. Such an outcome will allow RBI to provide an explanation to the Central Government on the reason for not being able to attain the goal. The Central Bank added that the fight against this inflation will be “dogged and prolonged, given the long and variable lags with which monetary policy operates, and fraught with uncertainties”.
The current story in the US :
The other side of the story says that in the United States of America, the inflation rate is increasing at a persistent rate and pointing to uncertainty toward the Federal Reserve’s decision to increase the interest rates. It might be probable that the plan is coming short of key pointers suggested by the economists that include verticals like disruption in the supply chain, energy expenses, and corporate pricing.
Rakeen Mabud, chief economist, of Groundwork Collaborative thinktank says, “Raising interest rates isn’t working, and the Fed’s overly aggressive actions are shoving our economy to the brink of a devastating recession”.
This is the fifth time that the US Feds have increased rates in the year 2022 and hints more increases to appear in the near times. The Feds also acknowledges that such challenging times will “bring some pain” in the pockets of the nation’s residents.
The global geopolitical situation is not at a current favorable condition. This can only mean a mounting burden on the monthly expenses as housing, food, and energy bills are a few of the most inflated rates in the market.
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