A Finance Ministry report on Tuesday flagged inflation as one of the “persistent downside risks”. It also feels that less transmission of policy rate review is likely to temper demand. However, it reiterated projection of strong growth during the current fiscal.
“With more than half of the current financial year witnessing positive developments in the economy, the full financial year should conclude as projected with a strong growth performance and macroeconomic stability. Yet, risks on the downside persist. Inflation is one of them that has kept both the government and the RBI on high alert,” Monthly Economic Review, prepared by the Economic Affairs Department said.
The observation comes at a time when retail inflation based on Consumer Price Index (CPI) dropped to 4.9 per cent in October from 5 per cent in September. It happened mainly because of lower prices of non-food and non-fuel products. However, food inflation remained at the same level in the month under…