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RIYADH: Lower food and commodity prices have led to India’s headline retail inflation forecast being revised down 20 basis points by Japanese financial holding company Nomura.
Nomura analysts put the inflation figure at 6.7 percent in 2022, but they expect inflation to average 6.0 percent in 2023 — up from 5.9 percent in their previous forecast.
“Some ameliorating factors have materialized in July, such as lower food and commodity prices, but retail prices are likely to remain sticky,” Nomura analysts Sonal Varma and Aurodeep Nandi said in a note.
Nomura expects India’s economic growth at 7.0 percent in 2022/23, which is seen easing to 5.5 percent in the next financial year that starts in April 2023.
It expects the pace of hikes in policy rates to slow down and sees the Reserve Bank of India hiking repo rate by 35 basis points in September and 25 bps in December.
India could scrap wheat import duty to cool domestic prices: sources
India could scrap a 40 percent duty on wheat imports and cap the amount of stocks traders can hold to try to dampen record high domestic prices in the world’s second-biggest producer, government and trade officials told Reuters on Monday.
Late in the day, the trade ministry said it would restrict the export of some wheat-derived products like finely milled “maida” and semolina from Aug. 14, with only an inter-ministerial committee allowed to clear their shipment. Exports of the items are generally small.
India barred wheat exports in May after the crop suffered a heatwave, but domestic prices still rose to a record high. Yet, international prices are still way above the domestic market, making it unviable for traders to buy from abroad.
If the government does remove the duty, and international prices also fall, then traders say they could start importing, especially during the upcoming festival season, when higher demand typically drives domestic prices higher.
“We are exploring all possible options to bring down the prices,” said a senior government official who held a discussion with industry officials last week.
India reassures availability of crop supply to Gulf states
Abdullah BalSharaf, chairman of the Food Items Committee at the Saudi Chambers Council, said that Indian producers have reassured the availability of crops including the Basmati grains to Gulf states, as the country reported adequate rainfalls this year.
In an interview with Asharq Al-Aawsat, he added that there is an abundance of inventory in the Saudi market, which will help to maintain price stability.
BalSharaf noted that there is a shortage of rainfall in India, but regions, where Basmati rice is being produced, have received adequate rainfall.
(With input from Reuters)