PM Modi calls for close cooperation among countries to tackle inflation

Prime Minister Narendra Modi on Tuesday said that the pandemic and then the conflict have changed the global inflation dynamics and called for a close cooperation among countries to tackle the issue. In an exclusive interview to moneycontrol.com, PM Modi said, “Inflation is a key issue that the world faces. First, the pandemic and then the conflict have changed the global inflation dynamics. As a result, both advanced countries and emerging economies are facing high inflation. This is a global issue that needs close cooperation.” He said that during our G20 Presidency, there was a meeting of G20 Finance Ministers and Central Bank Governors who recognised that there is a need to ensure that policies taken by each country to combat inflation do not lead to negative repercussions in other countries. “Further, for this, there is an understanding that timely and clear communication of policy stances by Central Banks is crucial,” said the Prime Minister. India’s central bank has raised the benchmark repo rate by 250 basis points (bps) to 6.5 percent in 2022-23, but has kept it unchanged so far in 2023-24. Driven by a surge in vegetable prices, Consumer Price Index (CPI)-led inflation in July jumped to a 15-month high of 7.44 percent. To arrest this spike in food prices, the Union government has already taken a number of steps, ranging from banning the export of non-basmati white rice, and subsidising the retail cost of tomatoes to imposing a 40 percent export duty on onions. He said, as far as India is concerned, the government has taken a number of steps to control inflation. “Even in the face of adversities and global dynamics, India’s inflation was two percentage points lower than the global average inflation rate in 2022. Yet, we are not resting at that and are continuing to make pro-people decisions to boost ease of living. For example, recently on Raksha Bandhan, you saw how we reduced the prices of LPG for all consumers,” said PM Modi.