Business News/ Economy / Economic recovery gained further momentum, volatile oil prices pose concerns: FinMin report

India’s economic recovery gained further momentum in September, enthused by ebbing of second wave, fast-paced vaccinations, and enhanced mobility, which is currently at around 90% of pre-pandemic level, stated a Finance Ministry report on Monday. 

Global economic recovery continues to be challenged by uneven rebound across countries, cost push inflationary pressures and inequitable vaccine roll out between advanced and emerging economies, as per the Ministry of Finance's monthly economic review for September.

However, volatile prices in the international crude oil markets and upward-bound prices of edible oils and metal products may continue to pose concerns, the report stated.

The Indian domestic equity market remains buoyant on reassuring indications of both global and domestic economic recovery. FPI flows into the country remain robust with India reporting highest inflow of $3 billion in September among emerging market economies. 

Thus far in this fiscal, India is reported to have received FPI worth $7.2 billion, the second highest after Brazil’s $9 billion. “These historic highs have engendered a bullish run in domestic equity markets as record additions of new Demat accounts broaden the base of equity investment in the country," the report further added.

Amidst easing of regional mobility curbs and emergence of growth impulses, industry is gaining lost ground, with Index of Industrial Production (IIP) witnessing a broad-based YoY growth of 11.5% in July 2021, led by growth in capital goods and consumer durables.

“With restoration of supply chains, improved mobility, and softening food inflation, Consumer price index (CPI) inflation retreated to a four month-low of 5.3 per cent in August 2021, clearly demonstrating that inflationary tendencies are pandemic induced and transitory," stated the FinMin report. 

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Updated: 11 Oct 2021, 01:44 PM IST
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