India’s Finance Ministry said the economy remains “cautiously resilient” but warned that inflation and weather risks could weigh on growth in the months ahead. The assessment came in its Monthly Economic Review for May, which pointed to elevated crude prices, a weaker rupee and a below-normal monsoon as key concerns.
The ministry said the gap between wholesale and retail inflation has widened, raising concern that upstream cost pressures may eventually reach consumers. Retail inflation edged up to 3.48% in April from 3.4% in March, while wholesale inflation rose sharply to 8.3% from 3.88% over the same period.
The review said recent fuel price increases could feed into transport, energy and food costs. It also warned that a significant rainfall deficit, combined with geopolitical tensions, could trigger food inflation and weaken rural demand.
Weather risks added to the caution. The India Meteorological Department lowered its monsoon forecast to around 92% of the long-period average, increasing concerns about pressure on food prices and farm-linked demand.
Even so, the ministry said domestic fundamentals remain broadly intact, citing expansion in manufacturing and services activity, a stable labour market and foreign exchange reserves that provide insulation against external shocks.
Read Article: Alibaba AI Models Surpass OpenAI and Google in Voice and Coding Benchmarks
