RBI Maintains Retail Inflation Projection Amidst Food Price Volatility

The Reserve Bank of India retained its retail inflation projection at 4.5% for the current fiscal year, assuming a normal monsoon. Food price volatility remains a concern, despite moderation in other inflation categories. RBI Governor Shaktikanta Das emphasized the need for vigilance and sustained price stability to support growth.

PTI | Mumbai | Updated: 07-06-2024 12:08 IST | Created: 07-06-2024 12:08 IST
RBI Maintains Retail Inflation Projection Amidst Food Price Volatility
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The Reserve Bank of India (RBI) on Friday upheld its projection for retail inflation at 4.5% for the current fiscal year, contingent on normal monsoon conditions. This stance arises amidst uncertainties in food prices, which necessitate close scrutiny.

Consumer Price Index (CPI)-based retail inflation forecasts stand at 4.5%, with quarterly projections of 4.9% in Q1 (April-June), 3.8% in Q2, 4.6% in Q3, and 4.5% in Q4. 'The risks are evenly balanced,' declared RBI Governor Shaktikanta Das during the bi-monthly monetary policy announcement.

Addressing the media, Das highlighted that CPI headline inflation eased during March-April, despite persistent pressures from food inflation that offset gains in core and fuel group disinflation. He noted that global food prices and industrial metals' prices have shown an upward trend, posing potential risks to firms' input costs.

Nonetheless, core inflation has softened for 11 consecutive months, and service inflation has moderated to historic lows. Predictions of an above-normal monsoon could benefit the kharif season, ensuring buffer stocks of wheat and rice remain high, potentially mitigating food inflation pressures.

Governor Das also cautioned about the uncertainty surrounding crude oil prices due to geopolitical tensions. He reiterated that the Monetary Policy Committee (MPC) remains vigilant to any upside risks, particularly from food inflation, to ensure inflation aligns with the target of 4% durably, setting the stage for strong economic growth.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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