The Reserve Bank of India’s (RBI) monetary policy committee maintained its earlier predictions for 2023-24 growth and inflation in its October review meeting, despite the central bank’s concerns about high inflation.
“So far as the Reserve Bank is concerned, we have identified high inflation as a major risk to macroeconomic stability and sustainable growth,” RBI Governor Shakitkanta Das said as part of his post-policy statement. “Accordingly, our monetary policy remains resolutely focused on aligning inflation to the 4 per cent target on a durable basis.”
Retail inflation is projected at 5.4 per cent for 2023-24, with Q2 (Jul-Sep) at 6.4 per cent, Q3 (Oct-Dec) at 5.6 per cent and Q4 (Jan-Mar) at 5.2 per cent. For Q1 (2024-25 fiscal), it is projected at 5.2 per cent.
The MPC also resolved, by a majority of 5 out of 6 members, to maintain its focus on gradually withdrawing accommodation to ensure that inflation gradually aligns with the objective while sustaining growth.
Headline inflation in India surged to 7.8 percent in July due to a jump in food prices such as wheat, rice, and vegetables such as tomatoes, before falling to 6.8 percent in August. Inflation data for September will be released in the coming days.
With a weight of around 6% in the CPI basket, vegetables contributed around one-third of CPI headline inflation in July and roughly one-fourth of overall inflation in August.
