Rising covid spends, fuel prices online delivery to crowd out consumer demand, warns SBI report

MUMBAI : The massive increase in healthcare spends, especially in the hinterland, steadily rising fuel prices and online delivery of articles will increase inflation pressure much higher on one hand and crowd out other consumer spending on the other, putting a big question mark on overall growth that’s still being driven by consumption demand, according to a report.

Soumya Kanti Ghosh, the group chief economic adviser at State Bank, in a note also noted that the steep fall in retail inflation in April to 4.29 per cent from 5.52 per cent in March is deceptive, as the CSO inflation number is primarily due to easing food prices as the rural core inflation has jumped to 6.4 per cent.