Gov’s Cea expects rural economy to be a tailwind for economic growth

The world economy is in the grip of galloping inflation and at the same time fears of a slowdown in growth. In an interview with CNBC-TV18, V Anantha Nageswaran, the Chief Economic Advisor expressed concern about the contribution of the rural economy to growth and hoped things would pick up in the second half of the year.

“There is legitimate concern about the ability of the rural economy to contribute to economic growth, but hopefully, and although the first two weeks of the monsoon have been somewhat disappointing, the deficit is catching up and the fact that the prices were raised. On the one hand, food prices are a big inconvenience for consumers, but they also provide better terms of trade for farmers,” he said.

As shown in the table above, with the exception of the last reading for the month of May, rural inflation remained above headline inflation in 2022. In December 2021, the reading was similar although it did not cross the bar of 6% – 5.36% rural against 5.59% of title.

“I hope that once the monsoon is accepted as having provided its normal quota of rainfall etc., the rural economy in the second half should be rather than a headwind but a tailwind for growth. economic,” Nageswaran added.

The chief economic adviser also echoed market sentiment that it is reasonable to expect the repo rate to rise to between 6 and 6.5% this year from 4.9%. and predicted that the nominal GDP and revenue assumptions will be higher than the budget estimates. .

For these details and more, watch the accompanying video

(Edited by : Abhishek Jha)

First post: STI

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