Inflation Hits Consumption: Due to the sharp jump in the inflation rate, it has affected the personal consumption of the people. Due to the high rate of inflation, there is a decrease in the expenditure on personal consumption, due to which the corporates are suffering on the sales front, as well as there is a decrease in private investment in carrying forward the expansion plan. These things are written in the bulletin issued by RBI.
The team led by RBI Deputy Governor Michael Devvrat Patra has said these things in an article written in the RBI Bulletin. In this article published in the Bulletin of the Reserve Bank of India, it has been said that there is a need to reduce inflation so that it can help in increasing the spending by the consumers as well as increasing their profits along with corporate revenue.
In this bulletin of RBI, it has been said that if we put together the recently released economic data and the results of the companies, then it is clearly visible that there has been a decrease in the expenditure on personal consumption due to inflation. Because of this, the sales of companies are decreasing and private investment in capacity creation is also decreasing.
According to this article in the RBI Bulletin, on the global front, while economies like India are once again on the path of growth, the situation of sluggishness or decline still persists in some countries.
However, it is a matter of relief for the RBI that good news has come on the inflation front in the months of April and May. Retail inflation has come down to 4.25 per cent in May due to fall in food inflation, after which good news is expected on the interest rates front in the next monetary policy meeting.
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