Will economic slowdown be triggered by rising inflation? SBI said in Ecowrap report – this concern is baseless

Highlights

According to the Ecowrap report, the probability of a global recession is only 20-30%.
The June data confirms that the higher level of inflation has passed.
Globally high inflation is troubling due to supply and demand problems.

New Delhi. According to the latest research report by State Bank of India (SBI) Ecowrap, the probability of a global recession is only 20-30%, while the possibility of prolonging the time of stagnation in the economy is high. The report also predicted that India’s inflation rate would reach 5% by March 2023.

“There is concern that an aggressive cycle of rising inflation and monetary policy could trigger a recession, especially in the US economy, but the concern is unfounded,” the report said. According to a report by India Infoline, a website providing stock market information, retail inflation in India remained above the 6 per cent limit set by the Reserve Bank of India (RBI) for the sixth consecutive month in June. Retail inflation stood at 7.01 per cent in June 2022.

Also read – Exports grew 23.52 percent in June, trade deficit at a record $ 26.18 billion

Inflation has passed its peak level
In this Ecowrap report, it has been said that in June 2022, CPI-based inflation has come down slightly to 7.01 percent. This figure was at 7.04 percent in May 2022. The reason behind the decline in this is the occurrence of inflation in food items. The June data confirms that the higher level of inflation has passed.

The SBI report states that the government has taken several steps to control inflation. This includes significant measures such as tax cuts on gasoline and diesel, restrictions on food exports, and reduction in cement costs amid a global fall in commodity prices. The bank’s study says that high inflation is troubling globally as a result of supply and demand problems.

Also read – Flour prices may be curbed, ban on export of flour and maida

related to food supply
It has also been said that food items and household items are the two categories on which prices have been continuously affected on the basis of supply. Apart from these, accessories related to mobile phones, electricity, and motor vehicles are in that category, in which price changes on the basis of demand.

The report said that the additional impact of the increase in the GST rate on retail inflation will be in the range of only 15-20 basis points, as the cost of many goods and services will be higher from July 18 as a result of the Goods and Services Tax (GST). According to the government, any increase in GST rates is to meet the “inefficiencies” in the value chain.

Tags: business news, Business news in hindi, Economy, SBI Bank

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