The Reserve Bank of India (RBI) on Thursday announced the decisions of the Monetary Policy Committee headed by Governor Shaktikanta Das. Along with this, the RBI also gave many important information on the country’s economy. The RBI has maintained the GDP growth forecast for the current financial year at 7.2 percent amid the forecast of a normal monsoon. The Reserve Bank has also maintained the retail inflation forecast at 4.5 percent.
Shaktikanta Das said that downside risks are arising due to long-term geopolitical tensions, instability in international financial markets and geo-economic fragmentation. He said that keeping all these factors in mind, real GDP growth is estimated to be 7.2 percent for the financial year 2024-25. The growth rate is estimated to be 7.1 percent in the first quarter, 7.2 percent in the second quarter, 7.3 percent in the third quarter and 7.2 percent in the fourth quarter.
Some relief in inflation expected due to rapid monsoon
The RBI governor said that the GDP growth rate for the first quarter of the financial year 2025-26 is estimated to be 7.2 percent. On inflation, the governor said that the southwest monsoon is expected to provide some relief to food inflation. Sowing has progressed well and the grain stock (buffer stock) remains above its standard. Apart from this, he said that global food prices have shown signs of reduction in July after registering an increase since March 2024.
Inflation rate estimated at 4.5 percent in the current financial year
The governor said that keeping in view the forecast of normal monsoon and 4.9 percent inflation in the first quarter, the Consumer Price Index (CPI) based inflation is estimated to be 4.5 percent for the financial year 2024-25. It will be 4.4 percent in the second quarter, 4.7 percent in the third quarter and 4.3 percent in the fourth quarter. He said that CPI inflation is estimated to be 4.4 percent for the first quarter of the financial year 2025-26. He said that due to higher than expected food inflation, the core CPI inflation had increased to 5.1 percent in June 2024.
Overall inflation at historic low
He said that inflation in fuels like petrol and diesel declined for the 10th consecutive month and overall inflation reached a historic low in May-June. The trend of high food prices is likely to continue in July as well. However, the favorable base effect may lead to a decline in core inflation during the month. He said that the impact of revision in milk prices and mobile tariffs needs to be monitored.
With PTI inputs
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