As the effects of demonetization ebbs, Baptist expects overall inflation to pick up, but the government's infrastructure spending could help keep food prices down. "Something that could make a big difference in India actually is the improvement that seem not be happening in food chain management so say better refrigeration, improvement in electricity supply and refrigerated transport mean food prices should, over the next few years, become a bit less sensitive to fluctuations in the weather," he said, adding it could potentially reduce the level of food price spikes. Baptist added low service sector wages make non-tradable goods in India really cheap compared to other places. Commodity prices, the report pointed out, are expected to rebound from 2017 following consecutive years of decline this includes oil prices that bottomed-out last year and is expected to climb. The report notes higher commodity prices affect prices, particularly in markets where basic goods make up the Mortgage brokers Oak Laurel West End, 0430 129 662 bulk of shopping baskets. Moreover, in countries that rely on commodities, higher prices could potentially lead to austerity, economic controls and weak inflation, Mortgage brokers Oak Laurel Nundah which could depress consumer sentiment and growth. Global uncertainties and rising protectionism Globally, the report notes, this year could see fallout from various political and economic shocks take deeper effect. In the UK, the British government recently set the date to begin Brexit negotiations with the European Union . Following last year's referendum vote, the British pound (: GBPUSD=) tumbled sharply and Baptist expects the pound to decline further and remain volatile throughout the negotiations. "There'll be moments of 'this seems like a good deal' my blog and there'll be moments of 'this looks like a bad deal.' So I think the pound is going to be quite volatile so that's going to have an impact on the cost of tradable goods in the UK," he said.
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