The impact of food inflation shock on core inflation was the maximum during the late 1990s, which has declined over time, the paper finds. The response of core inflation to a one per cent rise in food inflation has declined from 0.37 percentage points in the second quarter of 1998-99 to 0.14 percentage points in the third quarter of 2023-24. The responsiveness of core inflation to food shock has declined substantially in the post de jure flexible inflation targeting regime in India.
India Business News: Gold prices have dropped by Rs 2,900 over 10 days. The current price is Rs 71,065 per 10 grams, down from a record high of Rs 73,958. This decline has happened because investors have become less worried about geopolitical tensions in the Middle East.
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S Krishnakumar says: “Definitely this year has been quite a bit of surprise aided by expansion in operating margins. Nifty earnings probably would be upwards of Rs 1000 at this point for FY24. So, if you run forward one-year, two-year earnings, we should be around Rs 1,115 on a one-year basis and about Rs 1,280 on a two-year forward basis and discounting the current multiples.”
Global and regional uncertainties and domestic disruptions may keep inflationary pressures elevated in India for the coming months, the Finance Ministry said in a report. Retail inflation in India has surged to 7.4 per cent in July from 4.9 per cent in June. The latest rise in inflation could partly be attributed to the current spurt in tomato and other vegetable prices across India.