RBI MPC 2024: CPI inflation pegged at 4.5% for FY25, says Governor Shaktikanta Das

Reserve Bank of India (RBI) governor Shaktikanta Das on Thursday announced that the consumer price-based inflation (CPI) stood at 5.4 per cent for FY2023-24 and 5 per cent for Q4FY24. He said that CPI headline inflation for FY2024-25 is pegged at 4.5 per cent, with Q1 at  5 per cent, Q2 at 4 per cent, Q3 at 4.6 per cent and Q4 at 4.7 per cent. 

He also said that food price shocks and global supply chain disruptions can alter the central bank's trajectory while doing the same. Das went onto reiterated the central bank's commitment to contain inflation at a target of 4 per cent on a durable basis, while adding that the monetary policy committee will carefully monitor any sign of pressure on food prices. 

The RBI boss further said that increasing geopolitical volatility is impacting the global supply chain and putting pressure on commodity prices, especially crude oil. 

"On the inflation front, large and repetitive food price shocks are interrupting the pace of disinflation that is led by the moderation of core inflation. Geopolitical events and their impact on supply chains, and volatility in international financial markets and commodity prices are key sources of upside risks to inflation," Shaktikanta Das mentioned. 

He further noted that the government is adhering to fiscal consolidation, as also mentioned in the Interim Budget tabled on February 1. Today's MPC briefing comes a week after Union Finance Minister Nirmala Sitharaman tabled the Interim Budget 2024. 

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Headline inflation moderated to an average of 5.5 per cent during April-December 2023 from 6.7 per cent during FY2022-23, he said. Food price inflation, however, continued to impact the inflation trajectory, he further noted. 

Das said that inflation has softened considerably and is expected to moderate further in 2024. He also noted that CPI inflation moderated to 4.9 pc in October last year and increased successively in the next two months to 5.7 per cent by December last year.

"From its October 2023 trough of 4.9 per cent, CPI inflation increased
successively in the next two months to 5.7 per cent by December. Food inflation, primarily y-o-y vegetable price increases, drove the pick-up in headline inflation, even as deflation in fuel deepened. Core inflation (CPI inflation excluding food and fuel) softened to a four-year low of 3.8 per cent in December," the RBI Governor said. 

He further said that uncertainty in food prices, especially vegetables, continue to impinge on headline inflation. Despite this, Das explained that inflation on downward trajectory as the growth of the Indian economy has been propelled by structural drivers including improvement of infrastructure, ease of doing business, and improved quality of fiscal spending. 

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