RBI Governor Shaktikanta Das on Thursday hit the pause button for the second consecutive time and decided to keep the repo rate at 6.5%. Further Governor Das added, “Uncertainty on the future course of monetary policy remains as inflation is still high”. Headline inflation is easing but rules above target, Das added.
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RBI Governor Das pegged the GDP growth at 7.2%, and inflation was at 5.1% for FY24 on Thursday.
The real GDP growth is projected for FY2024 at 6.5%. Quarter-wise, Das projected GDP in Q1 FY2024 at 8%; Q2: 6.5%, Q3:6%, and Q4: 5.7%, respectively.
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Headline CPI inflation has come down to 4.8% in April 2023. CPI inflation was eased in April across food, fuel, and coal especially. RBI Governor projected headline inflation for FY2024 at 5.1% for FY2023.
In India, Consumer Price Inflation eased during March-April 2023 and moved into the tolerance band, declining from 6.7% in 2022-23. However, headline inflation is still above the target as per the latest data and is expected to remain so according to our projections for 2023-24. Inflation will remain above 4% throughout 2023-24, Das added.
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According to the RBI Governor, 1QFY2024 inflation estimated at 4.6%, 2QFY2024 at 5.2%, 3Q FY24 at 5.5%, and 4Q FY2024 at 5.2%, respectively.
He said retail inflation has been below the upper band of 6% for the last two years.
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“Taking into account all factors and assuming a normal monsoon, CPI headline inflation is projected at 5.1% for 2023-2024,” RBI Governor said on Thursday.
Das concluded that the “Goal is to reach the targeted 4% inflation going forward, our monetary policy actions are yielding desired results giving us space to keep rates unchanged in this meeting”.
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The MPC meeting took place against the backdrop of consumer price-based (CPI) inflation declining to a 18-month low of 4.7% in April. The Reserve Bank governor recently indicated that the May print would be lower than the April numbers. The CPI for May is scheduled to be announced on June 12.
During April’s MPC meeting, RBI projected 5.2% inflation for FY24, and real GDP growth at 6.5%.
