Despite a somewhat erratic monsoon, India’s reservoirs have been replenished which bodes well for the current Kharif crop and upcoming Rabi farm output, which in turn should help reduce food inflation further in coming months, the Finance Ministry said on Thursday, even as it noted waning confidence levels among consumers and industries.

Stressing that the real GDP growth projection of 6.5%-7% for this year still holds, the Ministry in its monthly economic review for July said that inflation is moderating, while the rise in exports and imports in the first four months of this fiscal suggests a trend reversal is underway with global demand recovering.

The review stressed that the consumer confidence and industrial outlook surveys conducted by the central bank “need to be monitored for future trends”, acknowledging that both surveys suggest a decline in their confidence about the current economic situation as well their optimism about likely prospects a year ahead.