New Delhi: A UN expert body on Thursday said surge in food prices in India is a matter of concern, but retail price inflation will cool down to 7.5% this year from around 12% last year.
The UN Economic Social Commission for Asia and Pacific (Escap) also projected the economy to grow by 8.3% in 2010-11, compared to estimated 7.2% last fiscal, fueled by the recovery in investment and private consumption.
“In India, consumer prices, particularly of food, remained stubbornly high and the consumer price index (for industrial workers) rose to about 9% in 2008. Inflationary pressure continued into 2009, largely resulting from the poor monsoon which had an adverse impact on food supplies, firming up of global commodity prices and the govt’s expansionary fiscal stance,” UN Escap said.
In its report on Economic and social survey of Asia and the Pacific 2010, the UN body said inflation as measured by the consumer price index was around 12% in 2009 and a faster increase in food prices has become a cause of concern.
There are a number of indices for consumer price inflation and CPI (IW) refers to items consumed by industrial workers.
The wholesale price-based food inflation had crossed 20% in December last year, but has been falling of late with the arrival of rabi crop and was at 16.04% in the third week of April this year.
On growth, Escap said, “With a revival in investment and private consumption, growth in exports and a strong expansion in industrial production in recent months, growth in GDP is projected to accelerate to 8.3 per cent in 2010.”
The UN body said the structural growth impulses of the economy remain strong in India, given the high domestic savings rate, sound financial system and the macro economic policy environment supportive of growth.