TAMING INFLATION OF SOUTH ASIAN NATIONS

  • Taming inflation is the top priority for South Asian countries as risks to growth and investment outlook could rise if price pressures persist at high levels, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Friday.
  • Speaking at an event organised by the International Monetary Fund (IMF), the RBI chief said policy challenges in the region have sharpened due to the COVID-19 pandemic and the war in Ukraine.
  • “While the recent softening of commodity prices and supply chain bottlenecks should help in lowering inflation going ahead, risks to growth and investment outlook may rise if inflation persists at high levels,” Mr. Das said.
  • “Prioritising price stability may therefore be the optimal policy choice… in the current context.”

Fuel, food inflation

  • Das said the region’s heavy dependence on imported fossil fuels had made it vulnerable to fuel inflation while food inflation had averaged more than 20% during the first three quarters of 2022.
  • “For successful disinflation, credible monetary policy actions accompanied by targeted supply side interventions, fiscal, trade policy and administrative measures have become the key instruments,” he added.
  • Apart from inflation, Mr. Das said reducing external debt vulnerabilities, focussing on high productive sectors, strengthening energy security, cooperation on greener economy and boosting tourism were key regional focus areas.
  • Earlier, IMF Deputy Managing Director Antoinette Sayeh said India was in a relative “bright spot” in the global economy, but needed to leverage its strength in services exports and extend it to job-rich manufacturing exports.
  • Union Minister Shri Anurag Singh Thakur to launch the themes of Y20 summit, logo and website in the curtain raiser event of Y20 Summit India on 6th January 2023

SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB

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