Tomato prices may ease by August end or early September, says Finance Ministry

It also noted that items like tomato, green chilli, ginger and garlic witnessed inflation of more than 50 percent. Hence, the abnormal increase in prices of certain specific items led to high food inflation in July 2023.

However, according to the Finance Ministry, the price pressure in food items is expected to be transitory. “The agricultural sector is picking up momentum with significant advancement in monsoon and kharif sowing. The procurement of wheat and rice has been progressing well, increasing the buffer stock levels of food grains to ensure food security in the country,” it said.

The government has already taken pre-emptive measures to restrain food inflation which, along with the arrival of fresh stock, is likely to subside price pressure in the market soon, according to the monthly review.

It adds that the external sector requires a closer watch to strengthen merchandise export growth in the face of slowing global demand. “Services exports continue to do well and are likely to continue doing so as the preference for remote working remains unabated, typically manifested in the proliferation of Global Capability Centres,” it said.

The report, however, says while domestic consumption and investment demand are expected to continue driving growth, global and regional uncertainties and domestic disruptions may keep inflationary pressures elevated for the coming months, warranting greater vigilance by the government and the RBI.