The inflation in food items is likely to be transitory, states the finance ministry on Tuesday.
In a statement, the ministry said, preemptive measures by the government and the arrival of fresh crops will cool prices.
However, the cause of concern is global uncertainty and domestic disruptions. These factors may keep inflationary pressures elevated for the coming months.
In its Monthly Economic Review for July, the ministry said while domestic consumption and investment demand are expected to continue driving growth, enhanced provision for capital expenditure by the government in the current fiscal is now leading to crowding in private investment.
Notably, the consumer price index-based retail inflation spiked to a 15-month high of 7.44 per cent in July 2023, with specific food commodities mainly driving the increase. Core inflation, however, stayed at a 39-month low of 4.9 per cent.