InvestorQ : What is really driving inflation higher? Is it food prices? Do you think that these food prices can really come down in the near future?
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What is really driving inflation higher? Is it food prices? Do you think that these food prices can really come down in the near future?

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NISHA Nayak answered.
8 months ago
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If you read the minutes of the MPC in detail, the key driver has been food inflation although the core inflation is also picking up. But food being the biggest component of the basket needs attention and this is where there is confidence that inflation should come down in the next quarter or so. Some medium term moderation in inflation looks likely. Food prices could benefit from a bumper food grain output this year. Despite weak Kharif, the unseasonal rains helped Rabi output. India is expected to close fiscal 2019-20 with food grain output of 292 million tons. That is a record output and nearly 4% better than last year. This combination of Rabi and Kharif may be a blessing for the food prices and we could see inflation come down gradually.
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