Citing uptick in inflation data and uncertainity in monsoon, the CEA said the country should get ready with supply side and monetary policy measures in the next financial year to tackle inflation uncertainty.
“There have been slight uptick in the inflation data for January and RBI has also maintained its forecast that inflation will come down gradually and we do have some uncertainity related to monsoon because of El Nino activity. So we should be ready with supply side and monetary policy measures in the next financial year,” the CEA said
He though added that the inflation is softening and will gradually come down. He further added that in the second half the monetary policy tightening may come to a halt and may even reverse, leading to improvement in capital flow and lower oil prices. The CEA also a normal monsoon and a good harvest will further ease food inflation.
The CEA said that the net FDI inflows is expected to be between $40-45 bn in FY23.