Impact of GST rate cuts fading? FMCG prices rise up to 5%; what's fueling the latest hike

The recent respite in fast-moving consumer goods (FMCG) prices following September's GST rate cuts appears to be short-lived. After an initial stabilization period, prices are now on the rise, with some products experiencing increases of up to 5%. Industry experts suggest that the GST cuts provided temporary relief, but underlying cost pressures have resurfaced, prompting companies to adjust their pricing strategies. Several factors are contributing to the latest price hikes in the FMCG sector. Rising raw material costs, escalating transportation expenses, and global supply chain disruptions are exerting significant pressure on manufacturers. Additionally, increased demand in certain segments has led companies to pass on some of these costs to consumers, resulting in noticeable price adjustments across various product categories. Consumers, who briefly enjoyed the benefits of reduced prices, are now faced with the reality of inflationary trends. Analysts predict that unless there are further interventions, such as additional tax reliefs or subsidies, the upward trajectory in FMCG prices might persist. As companies continue to navigate these economic challenges, the focus will likely shift towards balancing cost management with maintaining consumer trust and loyalty.

— Authored by Next24 Live