As regards inflation, international crude prices present an overwhelming risk, though headroom to adjust excise duties can delay the passthrough to pump prices. On the other hand, prospects for the easing of food inflation remain bright with record production and buffer stocks.
Strong supply-side interventions and increase in domestic production can check inflation-sensitive pulses and edible oil prices, though spillovers from the geopolitical situation cannot be ruled out. While cost-push pressures on core inflation remain elevated, selling prices of businesses remain subdued due to low passthrough of input cost pressures, given the large amount of slack in the economy.