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Financial Express – Will MSMEs benefit from the declining Wholesale Price Index?

By Avalon ConsultingJune 15, 2023June 22nd, 2023No Comments

Premchand Chandrasekharan, Partner at Avalon Consulting, gave his insights on the benefit for MSMEs from the declining Wholesale Price Index to Financial Express.

His view is that low inflation rate is likely to benefit certain MSMEs who can now avail of raw materials and energy at lower costs. This trend could provide some relief for MSMEs who have faced the brunt of high input costs. Lower headline inflation could convince RBI to take a more accommodative stance by reducing the repo rates with resultant trickle-down effects on short-term borrowing rates and working capital limits for cash-strapped and margin-squeezed MSMEs.

Declining wholesale price index

He further added that Tempering prices and interest rates could potentially boost consumer sentiments and spending capacity. So market demand for MSME goods and services could move in a positive direction.

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