New Delhi: The Reserve Bank of India (RBI) projected marginal easing in retail inflation to 5.2 percent in the current fiscal on Thursday, but cautioned that the fight against inflation is far from over. Although the RBI pared its inflation estimate from its February projection of 5.3 percent, RBI Governor Shaktikanta Das said the inflation outlook remains dynamic amid the recent jump in crude oil prices on account of OPEC decision to cut output.
Taking into account a crude oil price of USD 85 per barrel and a normal monsoon, the retail inflation in the current fiscal is projected to be 5.2 percent with risks evenly balanced, Das said.
For the June quarter, the retail inflation is expected to average 5.1 percent, and rise to 5.4 percent each in the September and December quarter. It is expected to decline to 5.2 percent in the March 2024 quarter.
Das said the Central bank's war against inflation will continue until the inflation is brought down to target level. "The fight against inflation is far from over....," the Governor said in the monetary policy statement.
The RBI has the mandate of keeping inflation at 4 percent, with a band of (+/-) 2 percent on either side. Retail inflation has remained above the RBI's upper tolerance level of 6 percent for two months and in February, it was 6.44 percent.
The Reserve Bank also marginally revised upwards the economic growth projection for the current fiscal to 6.5 percent, from its earlier estimate of 6.4 percent. Unveiling the first bi-monthly monetary policy of 2023-24 fiscal, RBI Governor Shaktikanta Das said the GDP growth in the first quarter of 2023-24 is expected at 7.8 percent.
The growth for the second, third and fourth quarter of the current fiscal has been projected at 6.2 percent, 6.1 percent and 5.9 percent, respectively.
The World Bank in its latest 'India Development Update' (IDU) has slashed the Gross Domestic Product (GDP) forecast to 6.3 percent, against the earlier estimate of 6.6 percent in 2023-24.
Asian Development Bank also expects India's economic growth to moderate to 6.4 percent due to tight monetary conditions and elevated oil prices, as compared to 6.8 percent expansion for the financial year ended March 2023.
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