Chief Economic Advisor (CEA) V Anantha Nageswaran on Wednesday said the fight against inflation is not over yet as supply side constraints may continue globally.
He added that perhaps, India has learnt to manage it with reforms, which are beginning to have a positive impact.
CEA Nageswaran was speaking at an event in Delhi School of Economics.
“We are not done yet in our fight against inflation. We are going to be a supply constrained world. If our inflation performance in 2022 and 2023 is any indicator, perhaps we have learnt to manage inflation. Supply side reforms will begin to have a positive impact,” Nageswaran.
Inflation is important as it has implications on social stability for households, he said.
“India has had supply side constraints because of which the growth spurts have been sprints rather than marathons, unlike China,” he added.
He further highlighted that the policymakers should thus think of productivity seriously, and going ahead, the return differential will lend a bias to Indian rupee vis a vis dollar for investors.
For January, the government has released the data saying the CPI-based inflation came in at 5.1 per cent.
In December 2023, retail inflation reached its four-month high of 5.69 per cent, following 5.55 per cent, recorded in November.
Also, the wholesale inflation in the country stood at 0.27 per cent in January, official data released on Wednesday showed. The reading was better than 0.73 per cent the previous month.
The RBI during the Monetary Policy Committee (MPC) meet retained the inflation forecast for 2023-24 at 5.4 per cent. For the current quarter (Q4), the projection was lowered to 5 per cent from 5.2 per cent earlier.