RBI Guv Shaktikanta Das projects CPI inflation at 5.3% for FY24

Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday projected Consumer Price Index (CPI) inflation to be at 5.3 per cent for 2023-24, with Q1 at 5 per cent, Q2 at 5.4 per cent, Q3 at 5.4 per cent and Q4 at 5.6 per cent.

"On the assumption of a normal monsoon, CPI inflation is projected at 5.3 per cent for 2023-24," the Governor said.

The Reserve Bank of India monetary policy committee (MPC) announced its latest monetary and credit policy on Wednesday.

Adding that headline inflation has moderated with negative momentum in November and December 2022, Shaktikanta Das said that "the stickiness of core or underlying inflation is a matter of concern."

"We need to see a decisive moderation in inflation. We have to remain unwavering in our commitment to bring down inflation. Thus, monetary policy has to be tailored to ensure a durable disinflation process."

He noted that geopolitical tensions, global financial market volatility, rising non-oil commodity prices and volatile crude oil prices present an upside risk to inflation.

Talking about the food inflation outlook for 2023-24, Das said that it will benefit from a likely bumper rabi harvest led by wheat and oilseeds.

"Mandi arrivals and kharif paddy procurement have been robust, resulting in improvement in buffer stocks of rice. All these developments augur favourably for the food inflation outlook in 2023-24," he said.

In the current unsettled global environment, emerging market economies (EMEs) are facing sharp trade-offs between supporting economic activity and controlling inflation, while preserving policy credibility, Das stated.

Meanwhile, the RBI Governor also raised the repo rate by 25 basis points to 6.5 per cent. Additionally, the Governor, in the monetary policy committee meeting announcements on Wednesday, said that GDP is expected to grow at 6.4 per cent for 2023-24.

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