RBI MPC Meet: Signs of relief on the inflation front, yet inflation will remain at 5 percent

RBI has changed the inflation forecast for all the four quarters as well as for the entire financial year. According to the central bank, inflation may remain at 4.6 percent in the first quarter. After that, the inflation figures can be more than 5 percent in the remaining three quarters.

The Reserve Bank of India on Thursday lowered its inflation forecast for the current financial year. The Reserve Bank has made one thing clear that inflation can remain above the target of 4 percent in the entire financial year. Barring the first quarter, inflation is expected to remain above 5 percent in the remaining three quarters. The reason for this is instability in monsoon, El Nino and global economy. By the way, today RBI MPC has not made any change in its interest rates.

How will inflation be

RBI has changed the inflation forecast for all the four quarters as well as for the entire financial year. According to the central bank, inflation may remain at 4.6 percent in the first quarter. After that, the inflation figures can be more than 5 percent in the remaining three quarters. According to the figures, the inflation rate can be seen at 5.2 percent in the second quarter. At the same time, 5.4 percent can be seen in the third quarter and 5.2 percent in the fourth quarter. In the month of April, the central bank had projected inflation to remain at 5.1 per cent in the first quarter, 5.4 per cent in the second quarter, 5.4 per cent in the third quarter and 5.2 per cent in the fourth quarter. Das said that in 2023-2024, inflation is expected to be above the target of 4 percent of the central bank.

Inflation came at the lower level of 18 months

The RBI governor said that the pace of monetary tightening has slowed down, but uncertainty remains as inflation is above target across the world and for India, it is important to keep a close and constant watch on rising inflation. For the last financial year, inflation was pegged at 6.5 per cent. India's CPI inflation eased to an 18-month low of 4.7 per cent in April from 5.66 per cent in the previous month, largely due to lower food prices, which make up almost half of the total CPI basket. RBI expects retail inflation next print to be less than 4.7 per cent.

4 percent inflation was seen in the year 2021

Inflation figures for May are due on June 12. The country's retail inflation in January 2021 was around 4 percentage-point at 4.06 per cent. In April 2022, consumer prices in India reached an eight-year high of 7.80 per cent. Das said the pressure eased across all categories of inflation and core inflation came down to 5.1 per cent in April. India's Federal Weather Office has predicted a 'normal' monsoon this year, which is crucial for the country's crop production and keeping food prices under control.