RBI Keeps FY25 CPI Inflation Forecast Unchanged at 4.5%

8 Aug 2024 , 11:12 AM

The Reserve Bank of India today kept its forecast for Consumer Price Index inflation in 2024-25 (Apr-Mar) unchanged at 4.5%. The CPI inflation had averaged 5.4% in 2023-24.

Though the RBI kept the average inflation for 2024-25 unchanged, it revised the quarterly forecasts.

The RBI has projected quarterly inflation at 4.4% in Jul-Sep, 4.7% in Oct-Dec and 4.3% in Jan-Mar as against the June forecast of 3.8% in Jul-Sep, 4.6% in Oct-Dec and 4.5% in Jan-Mar

CPI inflation had averaged 4.9% in Apr-Jun, the first quarter of 2024-25.

The RBI projected average CPI inflation in Apr-Jun next year at 4.4%.

Inflation is moderating, but the pace of decline is “uneven and slow”, RBI Governor Shaktikanta Das announcing the outcome of the Monetary Policy Committee meeting.

“The MPC may look through high food inflation if it is transitory, but in an environment of persisting high food inflation, as we are experiencing now, the MPC cannot afford to do so. It has to remain vigilant to prevent spillovers or second round effects from persistent food inflation and preserve the gains made so far in monetary policy credibility,” Das said.

Das said risks to its inflation forecasts are evenly balanced.