Global recession could help cool prices in India

Slower growth in advanced economies could help lower prices for crude oil and other commodities, helping to lower India’s tax burden, senior government officials told Business Today Television.

“It’s not a nice feeling, but it will drastically reduce government costs. A recession in the West could drive down commodity and oil prices. India’s imports of fertilizers and crude oil would become cheaper if the global economies were struggling on the growth front,” one of the senior officials told BT TV.

“In a way, we are closely linked to the global economy, but also a bit isolated. How can someone curb inflation? We have to wait for the right moment, and the situation will stabilize,” he said. added the manager.

Read also | ‘A bright spot on a dark horizon’: IMF chief hails India’s economic growth amid recession fears

Meanwhile, Oil Minister Hardeep Singh Puri said today that India will increase its crude oil production to reach 25% of demand by 2030. Currently India consumes five million barrels of oil per day and imports almost 85% of its production. total gross requirements.

India’s latest consumer price index inflation figures for September jumped to 7.4%, according to official data released this week. The rise in inflation was led by food products. Food inflation hit a 22-month high of 8.6%, while core inflation hit a 4-month high of 6.3%.

This is the ninth consecutive month that inflation has remained above the upper 6% band and the second consecutive quarter where the average is above 7%.

Read also | The world is dangerously close to recession, warns the president of the World Bank

The erratic rainfall is said to be the main reason for the rise in vegetable and fruit inflation. While grain inflation has also increased, government action and reasonably healthy Kharif production should address the concerns behind the further price hike.

The Reserve Bank of India (RBI), at its last monetary policy committee meeting on September 30, 2022, increased the repo rate by 50 basis points to 5.9%. During the monetary policy announcement, Governor Shaktikanta Das said the MPC believes continued high inflation requires a further calibrated withdrawal of monetary easing to limit widening price pressures, anchor inflation expectations and contain second-round effects.

About Joel Simmons

Check Also

UK recession: what does it mean for me and will it impact jobs?

The UK is in the early stages of what could be a major economic crisis …