The Ministry of Finance has released its Monthly Economic Update & Outlook for the month of May, warning of a potential rise in inflation ahead of the upcoming budget, reported 24NewsHDTV Channel.
According to the report, remittances, exports and imports increased in 10 months of the current fiscal year. The current account remained in surplus, foreign direct investment decreased. According to the report, the inflation rate for the current month is projected to remain between 1.5% and 2%, while in the following month it could increase to 3% to 4%. In April, the year-on-year inflation rate was recorded at 0.3%, the report stated.
The report mentioned a continuing upward trend in exports and remittances, with large-scale manufacturing (LSM) showing gradual improvement. The production of vehicles and the import of raw materials have also increased, according to the ministry. However, during the period from July to March, LSM saw a decline of 1.47%, the report highlighted. Favourable weather conditions and additional water availability are expected to lead to improved agricultural output. As a result, overall economic growth is likely to improve, the report added. During the first 10 months of the fiscal year, remittances rose by 30.9%, reaching a total of $31.21billion.
From July to April, exports increased by 6.8%, amounting to $27.27billion. In the same period, imports rose by 11.8%, reaching $48.61 billion, the report noted. The current account recorded a surplus of $1.88 billion between July and April, according to the Ministry of Finance. However, foreign direct investment (FDI) fell by 2.8%, totalling $1.78 billion during this period. The State Bank’s foreign exchange reserves increased to $11.4billion over the past 10 months, the report stated. Tax revenue from July to April saw a 26.3% increase, with ₨9.3trillion collected. Non-tax revenue surged by 69.9%, reaching ₨4.099 trillion, the report concluded.