RBI MPC: Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday gave good news on the inflation front while presenting the first bi-monthly monetary review of the current financial year. He said that monsoon conditions are expected to be normal this year. Due to this, consumer price index (CPI) based inflation for the current financial year is estimated to be 4.5 percent. This is less than the last financial year. However, Das said it seems that the elephant (inflation) has gone for a walk and the RBI wants it to remain in the jungle. The Central Government has given a target to the Reserve Bank of India (RBI) to keep the consumer price index based inflation at the level of four percent (up or down two percent).
Inflation expected to remain at 4.5 percent
RBI has kept the inflation estimate for the current financial year at 4.5 percent. This is less than the estimate of 5.4 percent for the previous financial year 2023-24. That means inflation will come down in this financial year. This is news of relief on the inflation front. According to RBI, inflation is likely to be 4.9 percent in the first quarter, 3.8 percent in the second quarter, 4.6 percent in the third quarter and 4.5 percent in the fourth quarter. Das has expressed the need to be cautious on the food prices front in view of the forecast of high temperatures between April-June. He also said that the impact of reduction in fuel prices will be visible on inflation in the coming months.
Growth rate remains at 7 percent
The Reserve Bank of India (RBI) has maintained the GDP (Gross Domestic Product) growth rate estimate for the current financial year 2024-25 at seven percent. This is lower than the estimate of 7.6 percent for 2023-24. In its February monetary policy, the RBI had estimated the GDP growth rate to be seven percent for the financial year starting April 1. Announcing the first bi-monthly monetary policy of the current financial year, RBI Governor Shaktikanta Das said rural demand is gaining momentum and sustained growth in the manufacturing sector should encourage private investment. However, along with this he said that geopolitical tensions and disruption in global trade routes may cause some problems. Das said that the real growth rate of the country’s GDP is estimated to be seven percent in 2024-25. The economic growth rate is estimated to be seven percent in the June quarter and 6.9 percent in the September quarter.
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