The Finance Ministry’s monthly economic report said the government is expecting an easing of food prices with the prediction of an above-normal monsoon in 2024.

The report, released on Thursday, also said that going forward robust foreign inflows and comfortable trade deficits are expected to keep the rupee within a comfortable range.

“Further easing of food prices is on the anvil as the India Meteorological Department has predicted above-normal rainfall during the monsoon season, which is likely to lead to higher production, assuming good spatial and temporal distribution of the rainfall,” the monthly report released by the Department of Economic Affairs said.

Further, the report said that retail inflation in the financial year 2023-24 witnessed a significant decline, reaching its lowest level since the COVID-19 pandemic.

Food inflation declined from 8.7% in February to 8.5% in March.

Despite the global challenges, India stands out with its strong economic performance, highlighting broad-based growth across sectors and asserting its pivotal role in supporting the global growth trajectory, it said.

“India continues to be the fastest-growing major economy with positive assessments of the growth outlook for the current financial year, by international organisations and the Reserve Bank of India.”

Leading indicators suggest an overall upturn in economic activity driven by expansion in both the manufacturing and service sectors.

“Geopolitical tensions remain a concern, but notwithstanding recent developments, risk perceptions have softened, offering a potential upside for growth.”

The Finance Ministry is expecting the trade deficit to decline in the coming years with the increased coverage of the Production Linked Incentive Scheme across various sectors, even though slowing global trade presents a challenging landscape for economies worldwide.

Electronics goods exports accounted for 6.7% of India’s total exports in financial year 2023-24, increasing from $23.6 billion in financial year 2022-23 to $29.1 billion in financial year 2023-24.

Notably, the Reserve Bank of India in its State of the Economy report cautioned that while retail inflation was in sight of hitting the 4 per cent target, extreme weather events, a spike in crude oil prices due to geopolitical uncertainty posed an inflation risk.